Tesla’s Profits Slide Over 70 Percent In The Fourth Quarter

Tesla’s latest earnings report paints a grim picture for the EV giant, as net income in the fourth quarter of 2024 dropped over 70% year-over-year. The company reported $2.3 billion in net income on $25.7 billion in revenue, falling short of analyst expectations of $27.26 billion. Tesla’s net income in Q4 2023 was significantly bolstered by a one-time $5.9 billion tax benefit, making this year’s decline appear even steeper.

For the full year, Tesla posted $7.1 billion in net income on $97.7 billion in revenue, marking a 6% decline compared to 2023. The company also relied heavily on regulatory credit sales, earning $692 million in Q4 and nearly $2.8 billion for the year. However, the future of these credits remains uncertain, as former President Trump has expressed intentions to dismantle California’s emissions program, which allows Tesla to profit from these sales.

Despite financial struggles, Tesla is making progress in cost reduction, with the cost of goods sold (COGS) per vehicle dropping below $35,000. The company reiterated plans to launch a more affordable EV in late 2024 and remains on track to introduce new models in early 2025. Meanwhile, deliveries for the refreshed Model Y are set to begin in Q1 2025.

Tesla also emphasized its advancements in AI and autonomy, stating that its Full Self-Driving (Supervised) system has surpassed 3 billion miles driven. The company increased AI training compute by 400% and remains focused on launching an unsupervised FSD option and a Robotaxi service later this year. As Tesla navigates market challenges and intensifying competition, especially in China, CEO Elon Musk’s dual role as a cost-cutter for the Trump administration adds another layer of complexity to the company’s trajectory.

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