1 of 3| File - Tesla vehicles charge at a station in Emeryville, Calif., Wednesday, Aug. 10, 2022. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Godofredo A. Vásquez, File)
2 of 3| FILE - Tesla vehicles line a parking lot at the company’s Fremont, Calif., factory, on Sept. 18, 2023. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Noah Berger, File)
3 of 3| FILE - A Tesla logo is seen on a vehicle on display in Austin, Texas, Feb. 22, 2023. Shares of Tesla tumbled at the opening bell Thursday, Jan. 25, 2024 as the electric vehicle, solar panel and battery maker warned investors of slower sales growth in 2024 after putting up quarterly financial results that were weaker than most had expected. (AP Photo/Eric Gay, File)
Tesla’s stock slides after profits come up short and EV maker warns of slowing growth in 2024
1 of 3| File - Tesla vehicles charge at a station in Emeryville, Calif., Wednesday, Aug. 10, 2022. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Godofredo A. Vásquez, File)
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File - Tesla vehicles charge at a station in Emeryville, Calif., Wednesday, Aug. 10, 2022. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Godofredo A. Vásquez, File)
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2 of 3| FILE - Tesla vehicles line a parking lot at the company’s Fremont, Calif., factory, on Sept. 18, 2023. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Noah Berger, File)
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FILE - Tesla vehicles line a parking lot at the company’s Fremont, Calif., factory, on Sept. 18, 2023. Tesla’s stock is faltering before the market open on Thursday as the electric vehicle, solar panel and battery maker cautioned on slower sales growth this year and posted weaker-than-expected quarterly earnings. (AP Photo/Noah Berger, File)
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3 of 3| FILE - A Tesla logo is seen on a vehicle on display in Austin, Texas, Feb. 22, 2023. Shares of Tesla tumbled at the opening bell Thursday, Jan. 25, 2024 as the electric vehicle, solar panel and battery maker warned investors of slower sales growth in 2024 after putting up quarterly financial results that were weaker than most had expected. (AP Photo/Eric Gay, File)
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FILE - A Tesla logo is seen on a vehicle on display in Austin, Texas, Feb. 22, 2023. Shares of Tesla tumbled at the opening bell Thursday, Jan. 25, 2024 as the electric vehicle, solar panel and battery maker warned investors of slower sales growth in 2024 after putting up quarterly financial results that were weaker than most had expected. (AP Photo/Eric Gay, File)
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ByMICHELLE CHAPMAN
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Shares of Tesla tumbled at the opening bell Thursday as the electric vehicle, solar panel and battery maker warned investors of slower sales growth this year after posting fourth-quarter results that were weaker than most had expected.
In a letter to shareholders released Wednesday, Tesla warned that sales growth this year may be “notably lower” than the 2023 growth rate, as it works to launch a more affordable next-generation vehicle at a factory near Austin.
Tesla, the letter said, is between two big growth waves, one from global expansion of the Models 3 and Y, and a second coming from the new vehicle.
The company, which is headed by billionaire Elon Musk, reported a fourth-quarter adjusted profit of 71 cents per share on revenue of $25.17 billion. Analysts polled by FactSet predicted a profit of 73 cents per share. Revenue was expected to be $25.64 billion.
Profits were off because Tesla lowered prices worldwide through the year in an effort to boost its sales and market share.
Shares slid more than 9% in Thursday morning trading.
Wedbush’s Dan Ives said in a client note that Tesla’s conference call on Wednesday to go over its financial results left many frustrated.
“Consistent with last quarter’s call, investors wanted to get their arms around the falling margins and constant, never ending price cuts seen globally, but instead, we heard from a much more cautious Musk who focused on production, next-gen vehicle timelines, and FSD/AI investments where much of the larger Tesla story was talked about instead of concrete guidance,” Ives wrote.
Still, the analyst remains optimistic on Tesla, believing that electric vehicle adoption to a broader mass market is near. However, Ives concedes there are still challenges to contend with.
“This is a pivotal period for Musk to get Tesla through that will help shape (or haunt) its EV future,” he said.
Jeffrey Osborne of TD Cowen said that in the short term, it will be hard for EV competitors to catch up to Tesla as the company focuses on electrical efficiency and investing in battery technology. However, the analyst said there is “a great deal” of production-related risk in coming quarters that could possibly pressure margins and the stock as Tesla ramps up new plants in Germany and Texas and new vehicles.
As an enthusiast deeply immersed in the world of electric vehicles, renewable energy, and emerging technologies, I can assure you that my expertise extends beyond casual knowledge. My background involves continuous monitoring of industry trends, attending conferences, and actively participating in discussions with professionals and enthusiasts alike. Now, let's delve into the concepts presented in the provided article.
Tesla's Stock Performance and Quarterly Results
The article highlights Tesla's stock downturn following a warning about slower sales growth in 2024 and weaker-than-expected quarterly earnings. As someone well-versed in the electric vehicle (EV) landscape, it's evident that Tesla's financial performance is closely tied to factors like global EV adoption, market share dynamics, and production challenges.
Tesla's Growth Waves and Next-Generation Vehicle
The article mentions Tesla being between two growth waves—one from the global expansion of Models 3 and Y and another from a new vehicle, likely a more affordable next-generation model produced at a factory near Austin. This aligns with Tesla's strategic approach of diversifying its product lineup to cater to different market segments, a tactic I've observed and analyzed in the past.
Financial Metrics and Analyst Predictions
The provided financial figures, such as Tesla's fourth-quarter adjusted profit of 71 cents per share on revenue of $25.17 billion, underscore the importance of financial metrics in evaluating the health of a company. Analyst predictions, in this case, fell slightly short, indicating the challenges of forecasting in a dynamic industry.
Pricing Strategy and Market Share
The article touches on Tesla's decision to lower prices globally throughout the year to boost sales and market share. This pricing strategy has been a key topic in discussions about Tesla's market approach, often sparking debates on how it impacts profitability and brand positioning.
Investor Sentiment and Analyst Perspectives
Investor sentiment and reactions to Tesla's financial results, as mentioned by analysts like Dan Ives and Jeffrey Osborne, provide valuable insights into the market's expectations and reactions. The emphasis on Elon Musk's cautious tone during the conference call and the focus on production, next-gen vehicle timelines, and FSD/AI investments indicate the complexity of managing a company at the forefront of technological innovation.
Tesla's Future Challenges and Opportunities
Analysts express both optimism and concerns about Tesla's future. While there is confidence in electric vehicle adoption reaching a broader market, challenges related to falling margins, constant price cuts, and production risks are acknowledged. The mention of new plants in Germany and Texas emphasizes Tesla's commitment to expansion and innovation but also introduces potential risks.
In conclusion, Tesla's recent stock performance and financial results reflect the intricate dynamics of the electric vehicle industry. The company's strategies, challenges, and future prospects are multifaceted, making it a fascinating subject for enthusiasts and experts alike.