Tesla has published its financial report for Q4 2024, and it doesn’t look good. Despite the fact that the company recorded a 1.9% year-on-year increase in revenues from $25.2 billion to $25.7 billion, net profit fell by a staggering 70%. According to the results of Q4 2024, the amount of profit amounted to $2.3 billion.
Tesla failed to meet analysts’ expectations on both counts. The company recorded a 6% drop in net profit for the whole of 2024 compared to 2023. In the final report, the company has $7.1 billion in net profit on revenue of $97.7 billion.
Revenue from car sales in the last quarter fell by about 8% year-on-year to $19.8 billion. Notably, a significant portion of the company’s revenue comes from the sale of regulatory credits (special credits or points granted by governments to vehicle manufacturers for meeting environmental standards) to other automakers, which amounted to $692 million in Q4 2024.
Growing competition and lower car prices in general have contributed to Tesla’s declining profitability. Investors fear that Tesla’s aging model lineup will not help in 2025 either. Perhaps focusing on the extravagant and expensive Cybertruck instead of working on the affordable Model 2 costing less than $25 thousand is one of the reasons why Tesla’s profits are falling. Or, the recent controversial actions of Elon Musk may also have something to do with it.
Looking to the future, Tesla believes that the situation will change as soon as a new affordable electric car is available by the end of the year, and the updated Model Y will gain momentum in sales in the first quarter of 2025. The financial report also relies on the electric vehicle tax credit for the Cybertruck, which will soon reduce its price in the US by $7.5 thousand, and on an overall reduction in car production costs due to improved raw material costs.
Source: arenaev
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