Tesla's Q4 2024 performance falls short of analyst projections, projecting growth in electric vehicles for 2025
**Tesla's Q4 2024 Financial Results: Record Deliveries Fall Short of Analyst Expectations**
In a conference call scheduled for 11:30 PM CET, Tesla revealed its Q4 2024 financial results, showcasing record electric vehicle deliveries but falling short of analyst expectations. Despite setting a new high of $25.7 billion in revenue and delivering a higher per-share adjusted earnings of 73 cents compared to the rest of the year, the company faced a significant decline in automotive revenue and regulatory credit income, leading to disappointing results.
Tesla's automotive revenue dropped by 16% to $16.7 billion in Q4 2024, impacting overall profitability despite the record deliveries. Revenue from regulatory credits, which historically softened profit shocks, plunged 51% to $439 million, removing a key cushion for earnings. As a result, adjusted net income dropped 23% to $1.4 billion, or 40 cents per share, falling short of Wall Street estimates.
Global vehicle deliveries also saw a 13.5% decrease in the quarter, reflecting weakness in growth and supply chain or demand issues despite the launch of an updated Model Y in June 2024. Analysts have pointed to tariffs, production bottlenecks, and strategic concerns as potential headwinds behind the missed targets, compounded by Elon Musk’s political distractions and the company facing a “positive crossroads” in its growth story.
Despite the setbacks, Tesla remains optimistic about its future. The company expects a "return to growth" in its electric vehicle business, plans to launch a robotaxi service using its FSD software in some parts of the US this year, and anticipates the production of the fully autonomous Tesla Cybercab to begin in 2025. Additionally, Tesla's production costs have fallen below $35,000, the lowest level to date, and the pilot production of its humanoid robot, Optimus, will begin before the end of 2025.
However, the Q4 report did not provide specific details about the expected growth. Tesla's revenue fell short of the consensus estimate of $27.2 billion, and its adjusted earnings per share were slightly higher than the previous year but below the investor-expected range of 75 to 77 cents. The company's operating profit margin of 6.2% in Q4 2024 was the second-lowest of the year, and its GAAP net income in Q4 2024 was $2.3 billion, down significantly from the $7.9 billion reported at the end of 2023.
In the aftermath of the financial results release, Tesla's stock initially fell by up to 5%, but then turned positive around 30 minutes later. The company's record electric vehicle deliveries and ambitious plans for the future may have helped to offset some of the concerns raised by the financial results, providing a glimmer of hope for investors.
[1] Tesla Q4 2024 Financial Results Press Release [2] Tesla Q4 2024 Earnings Call Transcript [3] Analyst Reports on Tesla's Q4 2024 Financial Results
In the subsequent discussion, Tesla attributes the decline in automotive revenue to decreased sales and reduced regulatory credit income, potentially signifying a need for innovative finance solutions to bolster profitability. An anticipated technology leap, the launch of a robotaxi service using FSD software and the production of the Tesla Cybercab, may help restore the company's growth trajectory.
