Tesla Reports Significant Drop in Fourth Quarter Profits

The latest earnings report from Tesla highlights a dramatic shift in the company's financial performance. In the fourth quarter of 2024, Tesla announced a net income of $2.3 billion on revenues of $25.7 billion. This marks a minor increase of 1.9 percent in revenue from $25.2 billion in Q4 2023; however, the net income has plummeted by an astonishing 70 percent. Last year’s Q4 net income was notably inflated by a one-time non-cash tax benefit totaling $5.9 billion.

Analysts had projected much higher revenues, estimating around $27.26 billion. Furthermore, for the entire year, Tesla reported a net income of $7.1 billion from $97.7 billion in revenues, reflecting a 6 percent decrease compared to 2023.

This earnings report follows an underwhelming production and delivery update wherein Tesla revealed a year-over-year decline in sales for the first time in over a decade. Despite the recent launch of a refreshed Model Y in North America, many experts believe Tesla’s product lineup appears outdated, especially in crucial markets like China, where local manufacturers are releasing competitively priced and technologically advanced electric vehicles (EVs).

Amidst this backdrop, Elon Musk has also been consolidating influence within the U.S. government, appointing former staff members to significant roles and managing a possible significant reduction of federal employees. Reports suggest Musk has even taken to sleeping at the Department of Government Efficiency's headquarters in Washington, D.C., reminiscent of his past practice of sleeping on the floors of Tesla's factories during intense production phases.

Investor inquiries regarding Tesla's plans for a more affordable vehicle have intensified. After initially shelving the concept of a budget "Model 2" expected to cost around $25,000, Musk faced backlash and has since reaffirmed the company’s commitment to pursuing this with little clarity on whether it will be a new model or a more budget-friendly version of the existing Model 3. Additionally, Musk mentioned the two-seat Cybercab set to start at $30,000, anticipated for purchase in 2026, although there are concerns about production hurdles.

To address questions from investors and analysts, Musk and other Tesla executives will hold a webcast at 5:30 PM ET.

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Earnings, Tesla, Profit