Tesla Earnings: Stock Drops; Report Falls Short; EV Maker Warns of 'Notably' Slower Growth (2024)

EV Maker Warns of 'Notably' Slower Growth

Tesla's financial results weren't enough to turn investor sentiment around.

The electric-vehicle company reported fourth-quarter earnings of 71 cents a share. Wall Street was looking for 73 cents.

Tesla also said its vehicle volume growth "may be notably lower than the growth rate achieved in 2023.”

Investors seeking clarity on what that meant for unit sales didn't get much from the company's earnings call.

Elon Musk took questions during the webcast on his recent voting control comments and a new vehicle.

Shares are down in after-hours trading.

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Updated 12 hours ago

Why Tesla Stock Is Falling

By

Al Root

Tesla stock dipped lower after the earnings call ended, down 5.6% in after-hours trading. The likely reason for the dip was a lack of firm sales guidance for 2024.

Tesla said growth is going to be substantially below 2023's level. Wall Street already expects growth to be lower in 2024.

Tesla shipped some 1.8 million vehicles in 2024, up about 38%. Wall Street expects about 2.1 million to 2.2 million units for 2024, up about 20% compared with 2023.

The vague guidance adds a level of new uncertainty for investors.

TeslaTSLA (U.S.: Nasdaq)

12 hours ago

Musk Gives an Update on Tesla's Self-Driving Software, Robots

By

Al Root

Tesla is betting big on self-driving cars. CEO Elon Musk in prior calls hinted that other auto makers were considering licensing Tesla’s so-called Full Self Driving software. No one has licensed that technology yet, Musk said on today's call.

The EV maker is also developing a humanoid robot named Optimus. The AI-trained robot is designed to supplement human labor and do jobs that are either mundane or dangerous. Telsa has “a good chance” of shipping some robots in 2025, Musk said.

TeslaTSLA (U.S.: Nasdaq)

Tesla CEO Elon Musk recently posted on his social media platform X that he wanted more control of the EV maker—about 25% of the voting stock, he said.

Without more control, Musk said he would consider taking new artificial intelligence and robotics products to another company, likely founded by Musk, instead of producing them at Tesla.

A question about these comments came up early in the Q&A session.

Musk reiterated that 25% is the level he wants and feels that number gives him the influence he requires at the company.

He said he would accept a new class of super-voting stock. That would mean the board wouldn't necessarily have to give him $30 billion worth of Tesla stock, the amount that would get Musk to 25% control, including his stock options.

A new class of super-voting stock would likely require a shareholder vote.

TeslaTSLA (U.S.: Nasdaq)

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12 hours ago

The Next Tesla Vehicle Will Come...

By

Al Root

The first question on the earnings call was about Tesla's next vehicle.

Investors want the EV company to make a lower-priced Tesla model, unofficially called the Model 2.

Musk offered some new details about timing. “I’m often optimistic” about timing, he said, adding the current schedule is to start production of Tesla's next-generation vehicle toward the end of 2025.

That is close to what investors have been expecting. Prior comments from management indicated orders and prototypes in 2024 and production in 2025.

Sooner is better for investors. Tesla introduced the Cybertruck in 2023, but that is a lower-volume vehicle given its price point.

The Model Y SUV, introduced in 2020, became the best-selling car in the world in 2023.

TeslaTSLA (U.S.: Nasdaq)

13 hours ago

The Earnings Call Is Underway. Some Early Highlights.

By

Al Root

Tesla Earnings: Stock Drops; Report Falls Short; EV Maker Warns of 'Notably' Slower Growth (1)

Tesla's earnings conference call began with remarks from CEO Elon Musk. One will disappoint investors.

He praised the performance of the Tesla team. Musk is particularly proud that the Fremont, Calif., plant is the “most productive” automotive plant in the Americas. Fremont produced some 560,000 units in 2023.

Looking ahead, Musk reiterated that Tesla is between “two major growth waves.” Wave one was the commercialization of mass-market battery-electric vehicles. Wave two is partly predicated on self-driving cars and energy-storage applications.

He added: “This is an earnings call, not a product announcement.” That will likely disappoint investors that want to hear more about Tesla's new models, in particular a lower-priced EV that could open up more of the market to the auto maker.

TeslaTSLA (U.S.: Nasdaq)

13 hours ago

Tesla's Cybertruck Didn't Get Mentioned Much

By

Al Root

Tesla Earnings: Stock Drops; Report Falls Short; EV Maker Warns of 'Notably' Slower Growth (2)

Cybertruck didn’t get a lot of ink in Tesla’s earnings report. The avant-garde pickup was mentioned six times.

The first reference was negative. The cost of the Cybertruck production ramp up hit profitability. The company also reiterated its stance that the Cybertruck production ramp up will take “longer than other models given its manufacturing complexity.”

Along with its hard-to-form stainless steel skin, the Cybertruck employs a "unibody" design versus many trucks that are body on frame. A unibody design, essentially, marries the car chassis and frame into one thing. They can be lighter, safer, and have better handling characteristics than traditional manufacturing methods.

Investors will have to wait until the 5:30 p.m. conference call to hear about production plans and demand. Wall Street currently projects that about 63,000 Cybertrucks will be delivered in 2024. That’s about 3% of Wall Street forecasted total sales volume. Most of those early Cybertruck deliveries will be high-end versions that cost upwards of $100,000.

TeslaTSLA (U.S.: Nasdaq)

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13 hours ago

Tesla Earnings Call: What to Know

By

Ben Levisohn

Tesla released earnings just after 4 p.m., and now there's a bit of a lull until the call starts at 5:30 p.m. You can tune in here.

Tesla stock has settled in since the earnings release, with shares off about 3% in after-hours trading. The call, though, should be the next volatility event, with investors listening for what CEO Elon Musk has to say about volume growth, profitability, and perhaps even the timing of a new model.

With a little time to kill now, we'll sit back, peruse the release, and enjoy the last minutes of quiet until the call is over.

TeslaTSLA (U.S.: Nasdaq)

14 hours ago

Tesla Isn’t Just a Car Company. How Its Other Businesses Performed.

By

Al Root

Tesla Earnings: Stock Drops; Report Falls Short; EV Maker Warns of 'Notably' Slower Growth (3)

Tesla, of course, does more than just sell cars.

It operates its own network of charging stations while also selling solar roofs to residential consumers and battery storage products to utilities, among other things.

Tesla’s non-automotive sales in the fourth quarter hit $3.6 billion in the fourth quarter, up 4% year over year. For the full year, sales came in at almost $15 billion, up 27% year over year. Non-automotive gross profit margins were about 11% in 2023, up from 4% in 2022.

The company ended the year with 54,892 charging ports in operation, up from 42,419 at the end of 2022.

Tesla deployed 3.2 gigawatt hours of battery storage in the fourth quarter, up 30% year over year. For the full year, Tesla deployed 14.7 gigawatt hours of storage, up 125% year over year.

Solar roof deployment hit 223 megawatts in 2023, down about 35% year over year.

Tesla released what it calls Version 12 of its FSD Beta autonomous driving software in the fourth quarter. FSD is short for Full-Self Driving. Tesla also said in its news release it introduced the second generation of its humanoid robot called Optimus.

TeslaTSLA (U.S.: Nasdaq)

14 hours ago

Tesla Warns of 'Notably' Slower Growth. How That Could Be Good News.

By

Al Root

Tesla's volume growth will slow in 2024, but that could end up being good news for the stock.

At first glance, there doesn't look to be much good news. Shares were down 2.7% in after-hours trading after both earnings and sales fell short of analyst expectations. But as noted previously, automotive gross profit margins, excluding regulatory credit sales, came in a 17.1%, better than expected. Without that increase, the stock's drop might have been worse.

Still, margins are down from 24.3% reported in the fourth quarter of 2022 as aggressive price cutting eroded profitability. The average price of a new Tesla sold in the fourth quarter was roughly $43,600, down about $8,000 year over year. The average cost to build a Tesla was roughly $36,000, down about $3,000 year over year.

The price cuts were designed to offset the impact of rising rates and to stimulate demand. They worked. Tesla sold some 1.8 million units in 2023, up from 1.3 million in 2022. This coming year is looking tougher. Tesla said in its news release that “our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023.”

Wall Street is currently projecting about 2.1 million units sold in 2024, up 20%. That growth rate is significantly below last year's 38%. For now, Wall Street projections for 2024 unit sales look safe.

If Tesla is satisfied with 20% volume growth for 2024, it might not have to cut prices as aggressively. No more price cuts would be welcomed by investors.

Analysts and investors will have to wait for the company’s conference call, which starts at 5:30 p.m. Eastern time to hear more details.

TeslaTSLA (U.S.: Nasdaq)

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14 hours ago

Tesla Has Problems. Margins Weren't One of Them.

By

Al Root

Tesla earnings missed expectations, but not because of its profit margins.

Automotive gross profit margins, excluding regulatory credit sales, rose to 17.1%, up from 16.3% in the third quarter and better than the 16.7% Wall Street had been expecting. It also ended four-quarter streak of declining margins.

TeslaTSLA (U.S.: Nasdaq)

As an enthusiast deeply immersed in the world of electric vehicles and the automotive industry, I bring forth a wealth of knowledge to dissect the recent developments surrounding Tesla's financial results and growth projections for the future.

Tesla recently reported fourth-quarter earnings of 71 cents per share, falling slightly short of Wall Street's expectation of 73 cents. However, the real cause for concern lies in Tesla's announcement that its vehicle volume growth in the upcoming year "may be notably lower than the growth rate achieved in 2023." This uncertainty has triggered a 5.6% decline in Tesla's stock in after-hours trading.

The company shipped around 1.8 million vehicles in 2023, marking a 38% growth. However, Wall Street's anticipation for 2024 is more conservative, expecting 2.1 to 2.2 million units, reflecting a 20% growth compared to the previous year. This vague guidance from Tesla introduces a new layer of uncertainty for investors, who are seeking clarity on the company's sales outlook for the coming year.

Elon Musk, Tesla's CEO, addressed various topics during the earnings call, including the company's focus on self-driving cars. Musk mentioned Tesla's Full Self-Driving software, stating that no other automakers have licensed the technology yet. Additionally, he revealed that Tesla is working on a humanoid robot named Optimus, designed to supplement human labor and perform tasks deemed mundane or dangerous. Musk expressed confidence in the possibility of shipping these robots by 2025.

A significant highlight from the earnings call was Musk's reiterated desire for more control over Tesla. He posted on social media about wanting 25% of the voting stock and emphasized that without this control, he might consider taking new artificial intelligence and robotics products to another company, potentially founded by him.

Tesla's future vehicle lineup also garnered attention. Investors are keen on a lower-priced Tesla model, unofficially referred to as the Model 2. Musk provided some details on the timing, indicating that production of Tesla's next-generation vehicle is scheduled to begin towards the end of 2025, aligning with previous expectations.

The discussion around Tesla's Cybertruck was brief in the earnings report, with the production ramp-up being cited as a factor affecting profitability. Musk mentioned that the Cybertruck's unique manufacturing complexity contributes to a longer production ramp-up compared to other models.

Looking beyond vehicle sales, Tesla's diverse business portfolio includes operating its own network of charging stations, selling solar roofs to residential consumers, and offering battery storage products to utilities. Non-automotive sales for the fourth quarter reached $3.6 billion, with a notable increase in gross profit margins compared to the previous year.

Despite the slower growth projections for 2024 causing a dip in Tesla's stock, there are potential silver linings. The company's automotive gross profit margins, excluding regulatory credit sales, increased to 17.1%, surpassing Wall Street's expectations. This positive margin trend is crucial, especially as Tesla aims to navigate the challenges of aggressive price cuts and maintain profitability.

In summary, Tesla's recent financial results and growth outlook for 2024 have triggered fluctuations in investor sentiment. The company's focus on self-driving technology, new vehicle developments, and the pursuit of increased control by Elon Musk add layers of complexity to the narrative. As the automotive industry continues to evolve, Tesla's position remains central to the ongoing discussions surrounding electric vehicles and technological innovation.

Tesla Earnings: Stock Drops; Report Falls Short; EV Maker Warns of 'Notably' Slower Growth (2024)
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