André Thierig, plant manager of the Tesla Gigafactory Berlin-Brandenburg, stands at the final inspection of the production of Tesla Model Y electric vehicles.
Patrick Pleul | Picture Alliance | Getty Images
Tesla reported earnings and revenue for the fourth quarter that trailed analysts’ estimates. The stock initially sank in extended trading before rebounding.
Here’s how the company did vs. estimates from LSEG:
- Earnings per share: 73 cents, adjusted, vs 76 cents expected
- Revenue: $25.71 billion vs $27.26 billion expected
Tesla’s revenue increased just 2% from $25.17 billion a year earlier, while automotive revenue sank 8% to $19.8 billion from $21.56 billion in the same quarter last year. Operating income decreased 23% year-over-year to $1.6 billion.
The company cited reduced average selling prices across its Model 3 and Y, and S and X lines as a major reason for the decline.
Net income dropped 71% from a year earlier to $2.32 billion, or 66 cents a share, from $7.93 billion, or $2.27 a share. Last year’s net income figure was bolstered by a $5.9 billion one-time noncash tax benefit.
Tesla’s earnings report follows a steep rally in the company’s stock price tied to the election of President Donald Trump. Tesla CEO Elon Musk was the biggest backer of Trump’s campaign efforts and is now leading the president’s new government efficiency advisory board.
The company’s stock price has rallied sharply since Trump’s victory in November as investors bet that Musk’s influence would lead to both favorable policies and less oversight of his companies.
Operating margin for the quarter came in at 6.2%, narrowing from 8.2% during the same period a year earlier 10.8% in the previous quarter.
In early January, Tesla reported deliveries for the fourth quarter of 495,570. For the full year, deliveries came in at about 1.8 million, marking the company’s first annual decline. Deliveries are the closest approximation of sales reported by Tesla, but are not precisely defined in the company’s shareholder communications.
Hefty discounts
To end 2024, Tesla offered a range of discounts on inventory vehicles and special discounts for buyers in North America who were referred by another Tesla customer. In China, Tesla cut prices on its popular Model Y SUVs before debuting a refreshed version, the Model Y Juniper.
In its shareholder deck on Wednesday, Tesla noted that “affordability remains top of mind for customers.” The company said it intends to “review every aspect” of its cost of goods sold per vehicle to help make its EVs affordable.
Musk has been telling investors in recent quarters to focus less on the core business as it exists today and more on a future of autonomy and robotics.
In October, Tesla drummed up excitement among fans by showing off an early prototype version of a Cybercab at its “We, Robot” event. However, Tesla still doesn’t produce robotaxis. Instead, the company sells a premium version of its partially automated driving system called “FSD,” short for Full Self-Driving Supervised.
Meanwhile, Google’s Waymo has a growing commercial robotaxi offering in some U.S. markets, and China’s WeRide and Pony.ai are testing and commercially operating driverless ride-hailing services.
While Tesla didn’t give specific guidance on 2025 sales, it reiterated plans to “unlock an unsupervised FSD option” eventually, and launch a robotaxi business. Tesla said it expects to “begin launching” its driverless ride-hailing business “later this year in parts of the U.S.”
Tesla’s earnings call begins later in the afternoon. The company uses online forum Say Technologies to solicit and choose investor questions for execs to answer on the calls.
As of Tuesday, more than 100 inquiries had flooded in about Tesla’s plans around autonomous vehicle technology. Additionally, many shareholders submitted questions about Musk’s obligations at the White House, and about the impact of his political and public conduct on the company.
Musk has recently made offensive jokes and gestures making light of the Holocaust, and has promoted Germany’s far-right, anti-immigrant party AfD, or Alternative fur Deutschland, ahead of the country’s elections in February.
As CNBC previously reported, Tesla’s brand value shed $15 billion in 2024, owing to multiple factors including the company’s aging lineup of EVs, and Musk’s incendiary political rhetoric and conduct, according to research by Brand Finance.
Tesla’s energy business fared much better in the quarter than its core automotive unit.
The company reported energy generation and storage revenue of $3.06 billion for the three months ending 2024, up 113% from the same period in the prior year. Automotive regulatory credit revenue in the quarter amounted to $692 million.