It's a good thing forTeslathat its CEO has cozied up to Trump, because the company'slatest numbers are awful.
Teslamissed expectationswithearningsofUSD0.73per share(non-GAAP) and it missedrevenueexpectations withUSD25.707 billionduring the last quarter. The Wall Streetconsensusfor this quarter wasUSD27.224 billion in revenueand earnings ofUSD0.77 per share.
Tesla'sgross profitsweredown 6%year-over-year in Q4. That's despite sellingmore regulatory credits.
For the full-year 2024, Tesla'searnings per share is down 22%despite many seeing Tesla as a"growth stock":
The silver lining is that while growth has gone away, Tesla remainsprofitableand has grown itscash stack to USD36.6 billion.
That'ssignificantly below expectations. The bigger issue is that the misswould have been even worseif Tesla hadn't pulled a couple of levers.
Another big slug ofgreenhouse gas credit salescombined with an unusually large dollop of "other income", due mostly to an accounting change related toBitcoin holdings, added up toUSD1.5 billion.
Tax-adjusted, that'shalf of Tesla's entire earningsfor the quarter right there. These earnings aren't just weak butlow quality, too.
Tesla touted arecord quarterin terms ofvehicle and battery sales. Somehow that translated to theoppositefor its financials. The metric ofautomotive marginwith emissions credit salesstripped outhit itslowest since at least 2018, at13.6%.
Average revenue per vehicle sold, excluding leases and credits, droppedbelow USD40,000andgross marginon that basis slumped to aboutUSD5,100; again, thelowest since at least 2018.
In an oblique way, Tesla spelled out the problem, albeitframed as a win. It noted high up in Wed evening's earnings report that itreduced its average cost of vehicle productionto thelowest level everat underUSD35,000apiece.
But this draws attention to anunderlying problem: Tesla'sproduction costs are declining in tiny increments. The average drop per quarter over the past two years is less than 2%. This makes margins vulnerable in a price war - which is exactly what has happened with EVs amidslowing sales growth in the US and intense competition in China. Tesla'sageing modellineup compounds the issue.
The result isfalling pricestwinned withstubborn costsand, therefore, dramaticallylower margins.Consider that Teslasold 36% more vehicles in 2024than it didtwo years before,as well asfar more battery capacity, and yetoperating profit fell by about half.
These results are even more of agut punchwhen one recalls the last earnings call. Back then, Tesla was scrambling to recover from therobotaxi unveiling event flop. Tesla reported better-than-expected results soon after, albeit more of abottoming outthan a rebound.
But Elon Musk shifted the narrative completely bytouting big growth in Q4 vehicle sales and growth of another 20-30% in 2025. Tesla's value soared by more than a fifth the next day. As it turned out, salesmissed that guidancein the fourth quarter and, curiously, that2025 target wasn't repeatedwith the latest results - probably a good thing given Trump'santi-EV executive orders.
Nonetheless, the chief executive was in anexpansive moodon Wed's earnings call, albeit mostly about things other than theEV salesthat account for thevast majority of Tesla's revenue and profits.
Musk declared that "the reality ofautonomyis upon us", before going on to say that it wasn't quite upon us, and Tesla will launch ageofenced robotaxi servicein Austin in Jun.Tesla's stock popped in after-market tradingon that line, despite the fact that it simply pinpointed a month for a 2025 target Musk hadalready touted previously.
Musk also didn't mention anyrobotaxis in Californiathis year, as he had before - until someone asked a question. He then expressed confidence in Tesla launching unsupervised full self driving not just in the Golden State but many regions of the country. You just don't get guidance in quite this format with other companies.
Musk's promises have to be taken with a pinch of salt as thetimelines can be stretched indefinitely.
bullrider_21
OP
:
At the start of last year, I already predicted it would be a bad year for Tesla's deliveries. No new models, price cuts and high interest rate would affect its profit margins and results. But the market chose to focus on Musk's promises and his relationship with Trump and the stock rallied.
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bullrider_21 OP : At the start of last year, I already predicted it would be a bad year for Tesla's deliveries. No new models, price cuts and high interest rate would affect its profit margins and results. But the market chose to focus on Musk's promises and his relationship with Trump and the stock rallied.