Tesla’s Fourth-Quarter Performance
Tesla’s stock (TSLA) dropped by 8% because the company’s earnings for the fourth quarter didn’t meet expectations.
The expected revenue was $25.87 billion, but Tesla’s actual revenue was slightly lower at $25.17 billion.
The adjusted earnings per share (EPS) were expected to be $0.73, but Tesla reported $0.71.
Tesla’s Full-Year Production Outlook
Tesla gave a not-so-positive outlook for its full-year production, saying that the growth rate might be lower than in 2023.
The focus on launching a new vehicle at Gigafactory Texas is one of the reasons for the potentially slower growth.
The projected production for 2024 might fall short of the expected 2.19 million, representing a 21% increase from 2023.
CEO Elon Musk mentioned that the next-generation vehicle is planned for the second half of 2025.
Factors Affecting Profitability
Tesla’s profit dropped because of pressure on profit margins, especially due to cost-cutting efforts since late 2022.
The gross margin for Q4 was 17.6%, lower than the estimated 18.1%.
Challenges Faced by Tesla
Several challenges affected Tesla, including Hertz reducing its electric vehicle (EV) fleet, Tesla lowering prices in China, a production halt in Berlin, and demands related to Elon Musk’s stock.
The delivery growth rate for the year was 38%, below the target of a 50% compound annual growth rate (CAGR).
Future Plans and Concerns
Tesla mentioned strong demand for the Cybertruck, but production is expected to take longer than other models.
Elon Musk expressed concerns about his control over Tesla, mentioning the need for greater control to achieve the company’s wide-reaching artificial intelligence (AI) ambitions.
There are worries about potential loss of control, with Musk expressing concerns about having “so little influence” in the future.
Recent Elon Musk Statement
Elon Musk spoke at a symposium about antisemitism in Krakow, Poland, on January 22, 2024, where he reiterated concerns about potential loss of control over Tesla.
Stock Recommendation
The article concludes with a “Hold” recommendation for Tesla stock, suggesting investors may want to wait and see how things develop before making any significant moves.