Tesla Shares Fall As Musk Warns of Slowing Growth
Tesla shares fell more than 12% on Thursday following a lackluster earnings report that fell short of expectations. On Wednesday, the electric vehicle company reported $21.6B in automotive revenue for 2023’s Q4, just a 1% year-over-year rise....
Facts
- Tesla shares fell more than 12% on Thursday following a lackluster earnings report that fell short of expectations. On Wednesday, the electric vehicle company reported $21.6B in automotive revenue for 2023’s Q4, just a 1% year-over-year rise.1
- Tesla warned of “notably lower” vehicle sales in 2024 while reporting that its Q4 gross margin fell amid price cuts and incentives to boost demand. The company said it was in between two growth waves: the first from 2017-2020, driven by the Models 3 and Y, and the second coming from its next-generation vehicle that could come next year.2
- CEO Elon Musk said Wednesday that Tesla expects to start production of its next-generation vehicle at its Texas factory in the second half of 2025. Tesla reportedly told suppliers that it will start making smaller crossover vehicles in June 2025 to compete with cheaper EVs produced by companies like China’s BYD.3
- While Tesla’s revenue fell short of expectations, the company reported a net income of $7.93B in the last quarter, up from $3.69B a year earlier. However, excluding one-time items such as its $5.9B noncash tax benefit for deferred tax assets, Tesla made $2.49B, or $0.71 per share — down 39% from last year and short of the $0.73 expectation.4
- Meanwhile, Tesla’s total net income for the year — excluding the tax benefit — decreased 23% to $10.88B, and its sales rose 37.7%, with 484,507 deliveries reported last quarter to close off the year at 1.8M.4
- As Tesla works to create its more affordable next-generation vehicle, Musk warned on Wednesday that Chinese automakers like BYD will “demolish” their global competition without tariffs or other trade barriers. Backed by Berkshire Hathaway, BYD surpassed Tesla as the top-selling EV company Q4 2023.5
Sources: 1CNBC, 2New York Post, 3US News & World Report, 4Associated Press and 5FOX News.
Narratives
- Narrative A, as provided by Futurism. Tesla's Q4 earnings report shows a company in free fall. In addition to an industry-wide lag in demand, Elon Musk is doing everything in his power to undermine Tesla. From blackmailing investors to receive 25% control to his unhinged behavior on X, Musk is far too volatile of an executive to have any trust in Tesla. Musk may try to play off Tesla’s lackluster revenue and stunted growth by claiming that the company will begin producing its next-generation vehicles in 2025, but it won't prevent the inevitable.
- Narrative B, as provided by ZeroHedge. While Wednesday’s earnings report and Thursday’s subsequent share price drop are not good news for Tesla, they are hardly significant indicators of the company’s long-term prospects. Following the EV boom of the late 2010s, demand for Teslas was projected to drop. However, the company is working tirelessly to launch its next generation of vehicles, which will allow Tesla to enter a new market. Musk is always pushing the edge, so we should believe him when he says Tesla will start producing more cheap models next year. Tesla is the pioneer of EVs and is still the king of the industry.
