8:06 am, January 31, 2025
Tesla saw its profits slump by more than 70% in the final quarter of last year as the firm fell well short of market expectations.
The EV brand run by Elon Musk announced earlier this week that it made $2.31bn (£1.86bn) in the final four months of 2024.
That figure is well down on the $7.93bn (£6.38bn) profit it posted in the same period of 2023, despite a rise in turnover.
Turnover in the quarter rose 2% to $25.7bn (£20.68bn), less than Wall Street’s forecast for $27.1bn(£21.81bn), according to FactSet.
The slight rise in revenue came after Tesla offered a series of incentives to drum up demand for its electric vehicles including low-interest loans and lower prices.
Earlier this month, Tesla said it sold 1.79 million vehicles in 2024, the first drop in more than a dozen years despite offers of 0% financing, free charging and low-priced leases.
However, the fourth quarter – which ran from October to December – did see signs of a rebound, with a record 495,570 vehicles sold.
Tesla’s gross profit margin fell to 16.3% for the quarter, down 1.3 percentage points from a year earlier.
In response to the results, Tesla stock initially fell after trading closed on Wednesday, then reversed course to rise more than 5%, adding to a steep climb since Donald Trump was elected president as investors bet that Musk’s advisory role in the new administration will help the company.
In its letter to shareholders released on Wednesday, Tesla said it is now working to drive the cost of its vehicles even lower.
The company said production of ‘more affordable’ models is expected to start in the first half of the year, though at ‘less cost reduction’ than previously expected.
It also said it hoped to offer completely unsupervised self-driving technology to Tesla customers later this year.
In a conference call with analysts, Musk said the company was ‘focused on maximising volume’, but then quickly pivoted to other goals and parts of the business.
‘AI and robotics – that will bear immense fruit,’ he said, adding: ‘I see a path, I’m not saying it’s an easy path, but I see a path for Tesla being the most valuable company in the world – by far, not even close.’
Tesla is currently the seventh-most valuable company in the S&P 500 with a market value of $1.25tn (£1tn).
Mr Musk also said he expects to introduce self-driving that does not require drivers to intervene at any moment in California and many other US regions by the end of the year.
