Tesla’s net income for the fourth quarter plummeted by 71% compared to the previous year, when earnings were significantly enhanced by a one-time tax benefit. The recent figures did not meet Wall Street’s expectations.
The electric vehicle manufacturer, led by Elon Musk, announced on Wednesday that it earned $2.31 billion from October to December, a steep drop from the $7.93 billion profit recorded during the same timeframe in 2023.
When excluding one-time items from both years, the Austin, Texas-based firm’s earnings increased by 3%, reaching 73 cents per share. However, this still fell short of analysts’ predictions, which were set at 77 cents per share.
Following the report, Tesla’s stock initially dipped by over 2% after trading hours on Wednesday, but it subsequently rebounded, despite the disappointing results. Shares have risen more than 50% since Donald Trump’s election as president, as investors anticipate that Musk’s advisory role in the new administration may benefit the company.
In the fourth quarter, revenue climbed 2% to $25.7 billion, which was below Wall Street’s forecast of $27.1 billion, as per FactSet.
This slight increase in revenue followed Tesla’s introduction of various incentives aimed at boosting demand for its electric vehicles, including low-interest loans and price reductions.
Earlier this month, Tesla reported selling 1.79 million vehicles in 2024, marking the first decline in over a decade, despite the availability of 0% financing, complimentary charging, and competitively priced leases. However, the fourth quarter portrayed signs of recovery, with record sales of 495,570 vehicles.
Tesla has encountered a decline in market share in various countries as traditional automakers and competitors in the EV sector, such as China’s BYD, provide consumers with more options.
In its shareholder letter released on Wednesday, Tesla stated that it is focused on reducing vehicle costs, noting that one model has dropped below $35,000, the lowest price point in its history.
Additionally, the company expressed its intention to introduce fully unsupervised self-driving technology to Tesla owners later this year.
Tesla’s gross profit margin decreased to 16.3% for the quarter, a decline of 1.3 percentage points compared to the same period last year.
