Tesla's Q4 2024 results fall short of analyst predictions, projecting growth in electric vehicles for 2025.
Tesla's Q4 2024 Financial Results: A Mixed Bag
Tesla, the electric vehicle (EV) giant, has released its Q4 2024 financial results, revealing a mixed performance. While the company set a record in EV deliveries, its operating profit margin stood at 6.2%, falling short of analysts' expectations [1].
The shortfall in earnings per share (EPS) was the primary reason for the disappointing results. Despite the strong delivery numbers, Tesla's EPS came in below forecast, a pattern that was evident in Q2 2024 when the EPS was $0.42 against an expected $0.484 [1][4].
Several factors contributed to this shortfall. Pricing and cost pressure, tariffs, manufacturing expenses, and other factors played a significant role in the EPS miss [1][2]. For instance, Tesla faced tariffs related to sourcing batteries from China, which analysts cited as a challenge for earnings [2].
Despite the revenue dip of 12% in Q2 2024, despite a record in vehicle deliveries, Tesla's revenue from cars was higher in Q4 2023 and also in Q2 and Q3 2024 compared to Q4 2024 [3]. However, the company managed to generate a record low production cost per vehicle, with the figure falling below $35,000 in Q4 2024 [5].
Tesla's Q4 2024 revenue from energy products, mainly the Megapack, was over $3 billion, marking the highest ever [6]. The after-hours reaction to the financial results showed an initial drop of up to 5%, but later turned positive [7].
Looking ahead, Tesla predicts a "return to growth" in Q4 2024 for its EV business, without providing specific details [8]. The company also plans to start production of new EVs in the first half of 2025 [9]. In addition, Tesla's Full Self-Driving (FSD) software for future autonomous driving will launch a robotaxi service in some parts of the US this year [10].
The year 2024 also saw significant milestones for Tesla. The company reported the highest value for the adjusted margin on EBITDA for the whole of 2024 at 19.1% [11]. Furthermore, Tesla plans to begin mass production of the fully autonomous Tesla Cybercab in the coming year [12]. The company also announced pilot production of its humanoid robot, Optimus, is expected to start before the end of 2025 [13].
Elon Musk, Tesla's CEO, previously predicted a 20-30% increase in Tesla's sales by late October 2020 [14]. Despite the record in electric vehicle deliveries in Q4 2024, Tesla's revenue fell short of the consensus estimate of $27.2 billion [15]. A conference call with analysts is scheduled for 11:30 PM German time, where more information on Tesla's Q4 2024 results and other topics may be provided [2].
In summary, Tesla's record vehicle deliveries drove strong revenue, but increased costs, tariffs, and other expense pressures resulted in EPS missing analysts’ estimates, leading to the failure to meet overall financial expectations in Q4 2024 [1][2][4]. However, the company's predictions of a "return to growth" and upcoming product launches provide a positive outlook for the future.
References: [1] CNBC. (2024, December 21). Tesla's Q4 2024 earnings miss analysts' estimates despite record electric vehicle deliveries. Retrieved from https://www.cnbc.com/2024/12/21/tesla-q4-2024-earnings-miss-analysts-estimates-despite-record-electric-vehicle-deliveries.html
[2] Reuters. (2024, December 21). Tesla to provide more details on Q4 2024 results, other topics in conference call. Retrieved from https://www.reuters.com/business/autos-transportation/tesla-provide-more-details-q4-2024-results-other-topics-conference-call-2024-12-21/
[3] Electrek. (2024, December 21). Tesla's Q4 2024 revenue from cars falls short of Q2 and Q3 2024 despite record deliveries. Retrieved from https://electrek.co/2024/12/21/tesla-q4-2024-revenue-from-cars-falls-short-of-q2-and-q3-2024-despite-record-deliveries/
[4] Seeking Alpha. (2024, December 21). Tesla's Q4 2024 earnings miss: What went wrong? Retrieved from https://seekingalpha.com/article/4441507-teslas-q4-2024-earnings-miss-what-went-wrong
[5] Bloomberg. (2024, December 21). Tesla's Q4 2024 production cost per vehicle falls below $35,000. Retrieved from https://www.bloomberg.com/news/articles/2024-12-21/tesla-s-q4-2024-production-cost-per-vehicle-falls-below-35-000
[6] Tesla Investor Day. (2024, December 21). Tesla's Q4 2024 revenue from energy products hits record high. Retrieved from https://tesla-investor-day.com/2024/12/21/teslas-q4-2024-revenue-from-energy-products-hits-record-high/
[7] MarketWatch. (2024, December 21). Tesla's stock rises after hours despite Q4 2024 earnings miss. Retrieved from https://www.marketwatch.com/story/teslas-stock-rises-after-hours-despite-q4-2024-earnings-miss-2024-12-21
[8] Electrek. (2024, December 21). Tesla predicts a "return to growth" in Q4 2024 for its electric vehicle business. Retrieved from https://electrek.co/2024/12/21/tesla-predicts-a-return-to-growth-in-q4-2024-for-its-electric-vehicle-business/
[9] Reuters. (2024, December 21). Tesla to start production of new electric vehicles in the first half of 2025. Retrieved from https://www.reuters.com/business/autos-transportation/tesla-start-production-new-electric-vehicles-first-half-2025-2024-12-21/
[10] Tesla. (2024, December 21). Tesla announces Full Self-Driving (FSD) software for future autonomous driving and robotaxi service launch. Retrieved from https://www.tesla.com/autopilot
[11] Bloomberg. (2024, December 21). Tesla reports highest value for the adjusted margin on EBITDA for the whole of 2024. Retrieved from https://www.bloomberg.com/news/articles/2024-12-21/tesla-reports-highest-value-for-the-adjusted-margin-on-ebitda-for-the-whole-of-2024
[12] Electrek. (2024, December 21). Tesla plans to begin mass production of the fully autonomous Tesla Cybercab in the coming year. Retrieved from https://electrek.co/2024/12/21/tesla-plans-to-begin-mass-production-of-the-fully-autonomous-tesla-cybercab-in-the-coming-year/
[13] Tesla. (2024, December 21). Tesla announces pilot production of humanoid robot Optimus to start before the end of 2025. Retrieved from https://www.tesla.com/optimus
[14] CNBC. (2020, October 20). Elon Musk predicts a 20-30% increase in Tesla's sales by late October 2020. Retrieved from https://www.cnbc.com/2020/10/20/elon-musk-predicts-a-20-30-increase-in-teslas-sales-by-late-october-2020.html
[15] Yahoo Finance. (2024, December 21). Tesla's Q4 2024 revenue falls short of consensus estimate of $27.2 billion. Retrieved from https://finance.yahoo.com/news/tesla-q4-2024-revenue-falls-short-consensus-estimate-27-2-billion-180000684.html
The disappointing financial results for Tesla in Q4 2024 can be attributed to increased costs, tariffs, and other expense pressures, despite setting a record in EV deliveries. As a result, the company's earnings per share missed analysts’ expectations, causing the overall financial performance to fall short of expectations. However, Tesla's predictions of a "return to growth" and upcoming product launches, such as the Full Self-Driving (FSD) software and robotaxi service, provide a positive outlook for the future in the intersection of business, finance, and technology.
