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Mixed Q4 Results and Lofty Promises Propel Tesla’s StockMixed Q4 Results and Lofty Promises Propel Tesla’s Stock

Tesla’s Q4 earnings call downplayed mixed results and Trump-era policy challenges while promising a bright near-future of autonomous cars and robots.

Michael C. Anderson, Editor-in-Chief, Battery Technology

February 3, 2025

5 Min Read
Tesla CEO Elon Musk.
Tesla CEO Elon Musk.Pool / Pool Getty Images Entertainment via Getty Images

Tesla’s fourth-quarter earnings report revealed a mixed financial picture, with slowing EV demand and tight margins weighing on its core business. However, CEO Elon Musk largely downplayed these challenges, devoting significant time on the earnings call to Tesla’s artificial intelligence ambitions, self-driving technology, and the Optimus humanoid robot project.

Investors responded positively, pushing the stock higher after an initial fall. However, the contrast between present struggles and future aspirations—or, to put it another way, between the AI/robotics company Tesla aspires to be and the EV, battery, and solar company it actually is to date—raises key questions about Tesla’s trajectory.

EV sales: slower growth, cost pressures

Despite Tesla’s position as an EV leader, Q4 2023 sales figures showed signs of strain. Tesla reported delivering approximately 484,500 vehicles in Q4 2024, a slight decline compared to the previous quarter's 494,000 deliveries. More significantly, the company experienced its first year-over-year sales decline since 2011. Tesla's revenue grew by just 2%, reaching $25.7 billion, up from $25.17 billion in the same quarter last year. Automotive revenue, however, saw an 8% decrease, falling to $19.8 billion from $21.56 billion, with $692 million of that total stemming from regulatory credits.

Related:GM’s EV Sales Justify Chief Barra’s ‘Fundamental’ Belief in Electrification

Operating income dropped 23% year over year, amounting to $1.6 billion. The decline was primarily attributed to lower average selling prices across the Model 3, Model Y, Model S, and Model X.

Net income fell by 71%, dropping to $2.32 billion, or 66 cents per share, compared to $7.93 billion, or $2.27 per share, in the previous year. The prior year's results were significantly boosted by a one-time, noncash tax benefit of $5.9 billion.

On the other hand, energy storage deployments—one of Tesla’s bright spots—reached 11GWh in the fourth quarter, and 31.4GWh for the year. As Energy Storage News noted, that’s a 244% growth year-on-year quarterly from 3.2GWh deployed in Q4 2023 and 114% growth year-on-year for the full year, from 14.7GWh deployed in 2023.

Lower-priced EV coming soon?

Tesla CFO Vaibhav Taneja said the long-awaited lower-price-point EV was coming soon: “We are still on track to launch a more affordable model in the first half of 2025 and will continue to expand our lineup from there,” he said.

A lower-priced EV, with the aim of bringing ICE drivers interested in EVs but put off by high-end Tesla models into Tesla showrooms—and thereby hastening EV adoption—was a long-stated goal of the company, but last year the project was thought to have been shelved. The last time Musk was asked about it on an earnings call, he refused to separate a future lower-cost EV product from the FSD autonomous driving product, arguing that the latter would be the more important selling point that the former.

Related:Tesla Q4 Sales Drop Marks 1st Annual Decline Since 2011: Investor Sentiment Divided

In any case, that a lower-priced EV model would be out by July is newsworthy.

Musk’s focus on autonomous driving and robots

Rather than dwelling on Tesla’s current financial and operational realities, Musk spent much of the call championing the company’s AI-driven future. He reiterated his confidence in Full Self-Driving (FSD), suggesting that Tesla’s AI capabilities could dramatically transform the industry. “We made many critical investments in 2024 in manufacturing AI and robotics that will bear immense fruit in the future.”

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He went on to say that Tesla could become “worth more than the next top five companies combined. There's a path to that .. and that is overwhelmingly due to autonomous vehicles and autonomous humanoid robots. So, our focus is actually building towards that.”

This emphasis on future technologies played well with investors, despite Tesla’s immediate challenges. While FSD remains controversial—both in terms of regulatory hurdles and real-world performance—Musk’s optimism fueled market excitement, reinforcing Tesla’s position as a tech-driven growth stock.

Related:7 Major Battery Manufacturing Investments of 2024

Sidestepping Trump’s dismantling of Biden’s EV mandate

During Tesla's Q4 earnings call, the effects of Trump administration tariffs were address just briefly. CFO Taneja acknowledged the obvious: “There's a lot of uncertainty around tariffs. Over the years, we've tried to localize our supply chain in every market, but we are still very reliant on parts from across the world for all our businesses. Therefore, the imposition of tariffs, which is very likely … will have an impact on our business and profitability.”

However Musk chose to downplay the issue: Dan Levy of Barclays asked him directly, “I know we've heard a lot about President Trump's plans to reverse the EV Mandate and I think there's a view that given regulation is a driver of EV uptake, this could slow EV uptake in the US. So, what would be your view on the right policy in the US, given your comments in the past of the need to push for sustainable transport?”

Instead of answering the question, Musk argued that EV uptake will happen in any case:

“At this point, I think that sustainable transport is inevitable. I'm highly confident that all transport will be autonomous electric, including aircraft, and that it simply, it can't be stopped any more than one could have stopped … the advent of the internal combustion engine. … It's going to happen. And you can't stop the advent of electric cars. It's going to happen. The only thing holding back electric cars was range, and that is the sole problem.”

According to Musk, the list of challenges holding back EVs is limited to a single item—and Trump’s regressive trade policies isn’t it.

About the Author

Michael C. Anderson

Editor-in-Chief, Battery Technology, Informa Markets - Engineering

Battery Technology Editor-in-Chief Michael C. Anderson has been covering manufacturing and transportation technology developments for more than a quarter-century, with editor roles at Manufacturing Engineering, Cutting Tool Engineering, Automotive Design & Production, and Smart Manufacturing. Before all of that, he taught English and literature at colleges in Japan and Michigan.

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