The company: «In 2024, the growth rate of our vehicle volume could be significantly lower than that achieved in 2023»
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Tesla opens the gates to disappointing quarterly profits and revenues, predicts new slowdowns in the year just begun and the stock ends up under pressure. In the wake of the fourth quarter 2023 accounts, the US king of electric cars lost around 5% in the after-market. Elon Musk’s brand is the only one of the Magnificent Seven US tech groups to have gone into reverse since the beginning of the year: in the period, while the other six giants drove the Wall Street indices to new records, it lost 16%, shaken from fears about demand in the sector, growing competition, especially from China, and the valuation on the stock market.
Tesla reported a profit decline, excluding extraordinary items, of 40% to 71 cents per share in the last part of 2023, versus the 73 cents expected. A 5.9 billion tax benefit inflated net profits, more than doubling them from 3.7 to 7.9 billion. For the year earnings per share slipped 23 percent. Tesla’s quarterly revenue increased 3% to $25.17 billion, marking the slowest pace of growth in more than three years. According to LSEG data, analysts on average expected a 5% increase to $25.62 billion.
The company also reported a gross margin of 17.6% for the three months ended in December, the lowest since 2019, compared with 23.8% a year earlier and analysts’ average estimate of 18.3%. In the third quarter, Tesla posted a gross margin of 17.9%. Profitability was penalized by price cuts and incentives to support demand, which was also reflected in record deliveries in the quarter. In 2023, Tesla delivered 1.8 million vehicles, up 38 percent.
Over the past year in the United States it has reduced the price of the Model Y, its most popular vehicle, by up to 26.5%. However, Tesla’s global efforts were not enough to repel the advance of rivals – for the first time Tesla ceded its place as the top EV maker in terms of sales to China’s BYD in the fourth quarter.
The prospects remain difficult. “In 2024, our vehicle volume growth rate may be significantly lower than that achieved in 2023, as our teams work to launch the next generation vehicle at the Gigafactory in Texas,” the company said in a statement. Analysts had previously anticipated a 21% increase for the current year, to 2.19 million vehicles, already far from the strategic goal of an average annual growth of 50% over multiple years.
Musk responded to the fears by claiming the arrival of important product innovations soon. In particular of a new and long-hypothesized new low-cost model, code-named Redwood. The CEO did not give details, but said the company “is very advanced” in planning and spoke of a “revolutionary manufacturing system”, much more sophisticated than what exists today, to churn it out. According to rumors, the next-generation production platform should take shape in the company’s factories in Texas. The car could arrive in mid-2025 and cost perhaps $25,000 in the basic version, according to rumors gathered by Reuters. Other analysts speak of just over 30,000 dollars. Much less in any case than the approximately $45,000 of the current least expensive Tesla model.
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Marco Valsania
Journalist
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2024-01-24 23:37:30
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