Tesla faced a tumultuous year in 2024, losing $15 billion in brand value due to several compounding factors, including the aging lineup of its electric vehicles (EVs) and CEO Elon Musk's controversial political statements and actions. The company reported a decline in vehicle deliveries for both the fourth quarter and the full year, marking its first annual drop. Despite these challenges, Tesla's revenue saw a slight increase, but automotive revenue experienced a significant decline.
In the fourth quarter of 2024, Tesla delivered 495,570 vehicles, showing a decrease from the previous year's figures. This brought the company's total annual deliveries to approximately 1.8 million vehicles, marking its first annual decline. Tesla's revenue for the quarter increased by a modest 2%, rising from $25.17 billion in the previous year to $25.71 billion. However, automotive revenue fell by 8%, dropping from $21.56 billion to $19.8 billion.
The company's financial performance revealed further concerns, as operating income decreased by 23% year-over-year to $1.6 billion. Earnings per share were reported at 73 cents, adjusted, falling short of the expected 76 cents. Additionally, Tesla's operating margin for the quarter narrowed to 6.2%, down from 8.2% in the same period a year earlier.
One of the critical issues contributing to Tesla's setbacks was the decreased average selling prices across its Model 3 and Y, as well as its S and X lines. In response, Tesla announced plans to "review every aspect" of its cost of goods sold per vehicle to make its EVs more affordable and competitive in the market.
Despite plans to launch a robotaxi business, Tesla still does not produce robotaxis. However, the company expressed optimism about "beginning to launch" its driverless ride-hailing business "later this year in parts of the U.S." This announcement aligns with Elon Musk's recent communications to investors, urging them to focus on Tesla's future in autonomy and robotics rather than its current core business operations.
The stock market responded positively to Tesla's prospects following Donald Trump's victory in November, with Tesla’s stock price rallying sharply as investors anticipated favorable policies and reduced oversight for Musk's companies. Nonetheless, the company's leadership has emphasized transparency and investor engagement by utilizing online forum Say Technologies to solicit and select questions from investors for executives to address during calls.
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