Tesla’s latest earnings report reveals a potential slowdown in electric vehicle (EV) sales growth for the year 2024. Despite achieving a record delivery of 1.8 million EVs in 2023, the company anticipates a notably lower growth in profits and revenue. This projection comes as Tesla prepares to introduce a new vehicle platform aimed at producing a smaller EV priced at around $25,000.
Key Takeaway
Tesla anticipates a potential slowdown in EV sales growth for 2024 as it focuses on the production of a smaller, more affordable EV priced at $25,000 and invests in new manufacturing technology.
Tesla’s Fourth Quarter Performance
Tesla’s strategy of driving sales through price cuts, coupled with the expenses associated with the production of the Cybertruck and other research and development (R&D) initiatives, has impacted its profits. The company reported a 47% decrease in operating income in the fourth quarter, largely attributed to increased operating expenses related to AI and R&D projects, as well as the costs of Cybertruck production ramp.
The $25,000 EV and Production Plans
CEO Elon Musk announced that the smaller and more affordable EV is scheduled to commence production in late 2025 at Tesla’s Texas factory. The company plans to expand production to a new factory in Mexico, with construction expected to begin after 2026. Additionally, Tesla aims to identify a third factory location outside of North America by the end of 2024 for further expansion of the next-generation EV production.
Financial Performance and Revenue Growth
Tesla reported a 3% increase in revenue in Q4, reaching $25.17 billion, slightly below analysts’ expectations. The company’s energy storage business, however, demonstrated significant growth, with storage deployments increasing by 125% year-over-year.
