Tesla underperforms analyst predictions in Q4 2024, projects electric vehicle expansion for 2025
In a significant development, Tesla, the leading electric vehicle (EV) manufacturer, announced its Q4 2024 financial results, revealing a production cost per vehicle that dropped below $35,000 for the first time. Despite this encouraging news, the company's stock price initially showed a dip of up to 5% in after-hours trading, before turning positive half an hour later.
While Tesla predicted a "return to growth" for its EV business, the company did not provide specific details in its Q4 report. Analysts had suggested that the financial results might not be as crucial if Tesla maintained its key projections, given the company's impressive record of electric vehicle deliveries in Q4 2024.
However, a closer look at the numbers reveals potential reasons behind the mixed reaction. The adjusted profit margin before tax stood at 19.1%, a slight decrease from previous quarters. The operating profit margin was 6.2%, indicating a further dip. Furthermore, while Tesla's revenue reached $25.7 billion, the adjusted earnings per share were 73 cents, lower than some analysts' expectations.
One of the factors contributing to these results could be increased competition, higher production costs, or lower pricing strategies. Tesla's margins might have been affected due to significant cost increases or more discounts offered to boost sales. Additionally, increased research and development costs for new technologies, such as robotaxi or advanced autonomous driving systems, could have impacted net income.
Moreover, macroeconomic challenges, trade policies, and geopolitical tensions could have affected Tesla's overall financial performance by impacting demand or supply chains. Analysts might have set high expectations based on Tesla's past performance, which could have been difficult to meet, especially if the company faced internal inefficiencies or external market pressures.
Despite these challenges, Tesla remains optimistic. The company reiterated its plans to launch a robotaxi service using its Full Self-Driving (FSD) software in some parts of the US this year. Tesla also plans to start pilot production of its humanoid robot, Optimus, before the end of 2025.
It is worth noting that approximately $3 billion of Tesla's Q4 2024 revenue came from energy products. Tesla's projections for the production of new electric vehicles and the start of serial production of the fully autonomous Tesla Cybercab in 2025 remain on track.
To provide more insights into its Q4 2024 financial results and other topics, Tesla has scheduled a conference call with analysts for 11:30 PM CET. The call will undoubtedly shed light on the factors that influenced Tesla's Q4 2024 performance and the company's future plans.
The finance sector may closely watch Tesla's conference call due to its Q4 2024 financial results showing a slight decrease in profit margins, causing a mixed reaction in the stock market. The tech-focused business might have been affected by increased costs related to new technologies such as robotaxi and autonomous driving systems, or by competition, production costs, or lower pricing strategies in the EV sector.
