Tesla's profits continue to decline in Q4 2024

Tesla published its earnings report for Q4 2024 and it's not looking great. Even though the company recorded a 1.9% revenue growth year-over-year from $25.2 billion to $25.7 billion, the net income fell a staggering 70%. That makes only $2.3 billion in profit in Q4 2024.

Tesla fell short of analysts' expectations in both indicators and even recorded a 6% slip in net income for the full 2024, compared to 2023. This is $7.1 billion net income on a revenue of $97.7 billion.

Automotive sales revenue has also fallen by about 8% year-over-year, down to $19.8 billion. Notably, about a quarter of the company's revenue came from regulatory credits sales to other car manufacturers, which amounted to $692 million in Q4 2024.

The growing competition and price reduction of vehicles in general have contributed to Tesla's decreasing profit margins. Investors fear that Tesla's aging portfolio won't help throughout 2025, either. Perhaps focusing on the extravagant and pricey Cybertruck instead of working on an affordable, sub-$25,000 Model 2 is part of the reason why Tesla is seeing its profits plummet. Or Elon Musk's recent controversial actions have a say here as well.

Looking ahead, Tesla believes things will turn around once a new affordable EV arrives by the end of the year and the refreshed Model Y picks up steam in Q1 2025. The financial report also bets on Cybertruck's EV tax credit that will soon slash $7,500 of its price in the US and the overall decrease in manufacturing costs of vehicles thanks to raw material cost improvements.

Source