Tesla Profits Plunge 70% in Q4 2024 Earnings Report

Tesla's Q4 2024 Earnings Report: Overview

In the latest earnings report released by Tesla, the company announced a net income of $2.3 billion on a revenue of $25.7 billion for the fourth quarter of 2024. This marks a 1.9% increase in revenue compared to $25.2 billion in Q4 2023, although net income saw a significant decrease of 70% year-over-year due, in part, to a one-time tax benefit received in the previous quarter.

Key Financial Metrics

• Net Income: $2.3 billion
• Revenue: $25.7 billion
• Year-over-Year Revenue Growth: 1.9%
• Net Income vs. Previous Year: 70% decrease
• Annual Revenue: $97.7 billion

Revenue from Regulatory Credits

A substantial portion of Tesla's earnings stemmed from selling $692 million in regulatory credits during Q4, which accounted for nearly a quarter of its profits. For the entire year, Tesla garnered almost $2.8 billion through these credits. However, with plans to terminate California’s emissions program, future income from these credits may be jeopardized.

Cost Reductions and Future Models

Tesla reported progress in reducing the cost of goods sold (COGS), aiming for a target of under $35,000 per vehicle, citing improvements in raw material costs. The company has also confirmed plans to launch a more affordable EV by the end of the year, with expectations for a refreshed Model Y arriving shortly.

Advancements in Autonomous Driving

The company announced impressive developments in its autonomous vehicle division, noting that Tesla drivers have collectively driven over 3 billion miles with the Full Self-Driving feature. Additionally, Tesla claims to have increased its AI training compute power by over 400% in 2024, paving the way for new capabilities in FSD.

Manufacturing Updates

In boosting its manufacturing capabilities, Tesla has unveiled updates on its Shanghai Megapack factory and the soon-to-be-operational Semi truck factory in Nevada, expected to initiate production in 2025.

The Cybertruck and Tax Credits

The much-anticipated Cybertruck is on the cusp of becoming eligible for the $7,500 federal EV tax credit, potentially enhancing its market appeal. However, this development is juxtaposed against President Trump’s signals to eliminate such tax incentives in the future.

Musk's Strategic Moves

Amidst these corporate developments, Elon Musk's role appears to blend with his political ambitions as he consolidates influence by placing former Tesla employees in pivotal government roles.

Looking Ahead

As competition increases, particularly in China, investors are keenly focused on Tesla's plans for affordability with potential new models. During an upcoming webcast, Musk and Tesla executives will address these crucial topics.

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