Tesla’s 4Q24 earnings and revenue report fell short of the analyst’s forecast, plunging the stock at the opening of an after-hour trading before rebounding.
LSEG poll expected Tesla’s revenue in 4Q24 at $27.26 billion with 76 cents earnings per share, while the company reports $25.71 billion in revenue and 73 cents earnings per share.
Tesla’s revenue grew only 2% from $25.17 billion in the previous year. Revenue from vehicles shrank 8% to $19.8 billion from $21.56 in the same period a year earlier, $692 million of which came from regulatory credits. Operating income sank 23% year-over-year to $1.6 billion.
The reduction of average selling prices across Model 3, Model Y, Model S, and Model X lines was attributed as a major reason for softened revenue.
At the end of 2024, Tesla offered a variety of discounts on inventory vehicles, and special discounts for North American customers that were referred by existing Tesla customers. In China, Tesla slashed the price of its Model Y SUVs before debuting the Model Y Juniper, a refreshed version of the SUVs.
Net income evaporated 71% from an earlier year to $2.32 billion or 66 cents per share, from $7.93 billion or $2.27 a share. The previous year’s net income was reinforced by a $5.9 billion one-time noncash tax benefit.
Tesla’s financial report came after a sharp boost in the company’s share due to President Donald Trump’s victory in the November election. Elon Musk, CEO of Tesla has been Trump’s biggest supporter during his campaign, the president then appointed him to the new government efficiency advisory board.
The steep rally in Tesla’s share is due to investors believing that Musk’s influence would net the company both favorable policies and less oversight.
In the fourth quarter, operating margin came at 6.2%, slumping from the same quarter a year ago at 8.2%, and 10.8% in the earlier quarter.
In earlier January, Tesla reported 4Q24 deliveries of 495,570 vehicles, while full-year deliveries sit at 1.8 million, the company’s first annual decline. While deliveries are Tesla’s closest sales estimation, the figures are not precisely defined for the company’s shareholders.
