(Reuters) -Tesla reported its first fall in yearly deliveries on Thursday as lucrative year-end incentives for the Elon Musk-led electric vehicle maker's aging lineup and the new Cybertruck pickup failed to lure customers wary of high borrowing costs.

Musk had earlier predicted "slight growth" in 2024 deliveries and offered a range of promotions including interest-free financing and free fast-charging to boost sales.

But reduced European subsidies, a shift in the United States toward lower-priced hybrid vehicles and tougher competition especially from China's BYD hurt Tesla.

The U.S. EV maker's shares closed about 6% lower.

"Lower deliveries reduces Tesla's growth and lowers the total addressable market for the company's ancillary services, including autonomous driving software, charging, and insurance," Morningstar analyst Seth Goldstein said in a note.

"The slight decline highlights that the current vehicle lineup is nearing market saturation," he added.

As demand for EVs slows, Musk has pivoted his focus on building a self-driving taxi business that is expected to boost Tesla's value.

He also backed President-elect Donald Trump with millions of dollars in campaign donations and analysts expect easier regulations from the new administration to help Tesla in the long run.

But with self-driving technology still under development and years away from commercialization, analysts have said Tesla would have to rely on its promised cheaper versions of current cars and the success of Cybertruck to achieve Musk's target of 20% to 30% sales growth in 2025.

The truck, known for its futuristic design, has been showing signs of weakness in demand.

Tesla is yet to disclose the delivery numbers for its Cybertruck. The company said on Thursday it handed over 471,930 Model 3 and Model Y vehicles and 23,640 units of other models, including the Model S sedan, Cybertruck and Model X premium SUV.

Overall, Tesla delivered 495,570 vehicles in the three months to Dec. 31, missing estimates of 503,269 units, according to 15 analysts polled by LSEG. It produced 459,445 vehicles in the period, down about 7% from a year earlier.

Deliveries for 2024 totaled 1.79 million, 1.1% lower than the prior year and below estimates of 1.806 million units, according to 19 analysts polled by LSEG.

Tesla's 2024 deliveries were ahead of BYD, which reported a 12.1% rise in sales of battery-electric vehicles to 1.76 million in 2024, thanks to competitive prices and a stronger push into Asian and European markets.

TRUMP BET

Tesla shares are coming off a strong 2024, in which they rose more than 60% after Trump's election with strong support from Musk.

Musk has said he plans to leverage his promised role as a government-efficiency czar under the Trump administration to advocate for a federal approval process for autonomous vehicles to replace the current state-specific laws, which he described as "incredibly painful" to navigate.

Tesla's Autopilot and "Full Self-Driving" technologies, which are not yet fully autonomous, have been under scrutiny due to lawsuits, U.S. traffic safety regulator probe and a Department of Justice criminal investigation.

Tesla is also under pressure from legacy automakers. Its October registrations in Europe fell 24%, due to a tight race from Volkswagen Group, whose Skoda Enyaq SUV dethroned Tesla's Model Y as the best-selling EV in the region, according to data research firm JATO Dynamics.

Trump's team is considering ending the $7,500 tax credit for consumer EV purchases, a move that could worsen the slowing shift to EVs in the U.S., Reuters reported in November.

"What was interesting is that their sell-through also declined in the year, even though people know that there's a tax credit elimination coming potentially in 2025," said Thomas Martin, senior portfolio manager at Globalt Investments.

"That didn't seem to accelerate anything, that may be telling."