Tesla Anticipates Slower 2024 Growth, Q4 Earnings Below Estimates
Electric vehicle giant Tesla reported lower-than-expected operating profits in the fourth quarter, despite increased revenues and a rise in auto deliveries. The company, led by Elon Musk, warned of a deceleration in volume growth for 2024 and revealed plans for a "next-generation" vehicle to succeed its existing fleet. Tesla's Q4 revenues reached $25.2 billion, a three percent increase from the previous year, with a 20 percent rise in auto deliveries. However, without a one-time non-cash provision of $5.9 billion related to deferred tax assets, profits were $2.5 billion, down nearly 40 percent from Q4 2022.
Tesla attributed the slowdown in growth to the transition period between major growth waves and the upcoming launch of a "next-generation" vehicle at Gigafactory Texas. The company's shares experienced a decline of over 16 percent in 2024, fueled by concerns about vehicle demand, electric vehicle oversupply, and the substantial costs associated with the production ramp-up of the Cybertruck. Elon Musk indicated the need for a higher stake, suggesting he might seek alternatives for artificial intelligence and robotics development unless his Tesla stake was increased to 25 percent from around 13 percent.
Investors are eagerly awaiting details about Tesla's new vehicle and hope for a more affordable electric vehicle (EV). Tesla assured that it is focused on introducing the next-generation platform, aiming to revolutionize vehicle manufacturing. However, concerns about Musk's demands for a higher stake raised worries among analysts, with JPMorgan Chase characterizing them as negative for Tesla shares due to the increased risk of Musk's departure and potential dilution of existing shares.
In after-hours trading, Tesla's shares fell by 3.4 percent.