Tesla reported a fourth-quarter profit that missed estimates and gave a poor full-year production outlook that weighed on the stock, although CEO Elon Musk confirmed that the company's next-generation vehicle would be available in the second half of the year will come onto the market in 2025.
For the fourth quarter, Tesla reported revenue of $25.17 billion, up from $25.87 billion (estimated), although sales rose about 3% year-over-year. From a profitability perspective, Tesla reported adjusted earnings per share of $0.71 versus $0.73 (estimated) and adjusted net income of $2.486 billion versus the stock market's expected $2.61 billion -Dollar.
Looking at full-year production, Tesla said the “vehicle volume growth rate could be significantly lower than the growth rate achieved in 2023 as our teams work to introduce the next-generation vehicle at Gigafactory Texas,” noting that would Falling short of Street estimates of 2.19 million for 2024, which would have represented a 21% increase over 2023.
However, in its earnings release and later in the conference call, Tesla mentioned the advancements of its next-generation platform. “We are focused on bringing the next-generation platform to market as quickly as possible and plan to begin production at Gigafactory Texas. This platform will revolutionize vehicle manufacturing.”
“We are very advanced with our next-generation low-cost vehicle; We're really excited about that. “It is a revolutionary manufacturing system that is far more advanced than any other in the world,” Musk clarified in the earnings call. The company's current schedule calls for this vehicle to enter production in the second half of 2025 becomes. This echoes what Portal previously reported that Tesla had told its suppliers that it wanted to begin production of a new mass-market electric vehicle codenamed “Redwood” in mid-2025.
Tesla's decline in profitability is likely due to downward pressure on margins since Tesla began cost-cutting efforts in late 2022. Tesla reported gross margin of 17.6% in the fourth quarter, compared to 18.1% estimated, a sharp year-over-year decline, and a sequential year-over-year decline of 17.9% in the third quarter.
The story goes on
Headlines like rental car provider Hertz's sale of thousands of electric vehicles, Tesla's price cuts in China, a two-week production halt in Berlin and CEO Elon Musk's timely demand for more inventory also weighed on Tesla.
Earlier this month, Tesla reported 484,507 fourth-quarter deliveries, beating Street estimates of 483,173, according to Bloomberg. This number marks an all-time record quarter for Tesla and is nearly 20,000 units higher than the previous record quarter of 466,000 units shipped in the second quarter of last year.
For the year, Tesla said vehicle deliveries rose 38% year over year to 1.81 million and production rose 35% year over year to 1.85 million. While the 38% delivery growth rate was below its 50% compound annual growth rate (CAGR) target, Tesla had previously said it would not meet that target due to factory closures and improvements in the third quarter.
Cybertruck deliveries are also notable. Tesla didn't disclose that total in its fourth-quarter delivery update, although the company did say the Cybertruck would take longer to ramp up production than other models. “[Cybertruck] Demand is out of control,” Musk said in the call, repeating similar comments to last year.
Tesla's new Cybertruck is on display at a Tesla store in San Diego, California on November 20, 2023. (Mike Blake/Portal/File Photo) (Portal / Portal)
Musk also addressed his comments last week, claiming that he needs to secure greater control over Tesla if the company wants to realize its far-reaching AI ambitions.
Musk said in the earnings call that given his current shareholding, he fears he will have “so little influence” in the future that a major shareholder could take control away from him or make a bad decision.
Elon Musk speaks at the symposium on anti-Semitism organized by the European Jewish Association on January 22, 2024 in Krakow, Poland. (STR/NurPhoto via Getty Images) (NurPhoto via Getty Images)
“I could be voted out of any shareholder advisory firm,” he said, citing Institutional Shareholder Services (ISS) and Glass Lewis, two large shareholder advisory firms, as examples. “[A] “Many activists are infiltrating shareholder rights organizations,” Musk said, adding that he is “not looking for additional economic benefits; I just want to be an effective steward of powerful technology.”
Pras Subramanian is a reporter for Yahoo Finance. You can keep following him Twitter and on Instagram.
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