Tesla Shares Slide as Q4 Earnings Fall Short, Caution Issued on Production Growth Rate

Tesla (TSLA) faced a decline in stock value following its Q4 earnings report, which failed to meet expectations, and a less optimistic outlook for full-year production. CEO Elon Musk did, however, confirm plans for the company’s next-generation vehicle, scheduled for release in the second half of 2025.

In the fourth quarter, Tesla reported revenue of $25.17 billion, slightly below the estimated $25.87 billion. Although revenue increased by approximately 3% from the previous year, the company’s adjusted earnings per share (EPS) was $0.71, missing the estimated $0.73. Adjusted net income stood at $2.486 billion, falling short of the $2.61 billion expected by the Street.

Concerning full-year production, Tesla projected a potential slowdown in its vehicle volume growth rate compared to the achievements of 2023. The company attributed this anticipated decline to the ongoing efforts in launching the next-generation vehicle at Gigafactory Texas. This outlook suggested that Tesla might not reach the Street’s estimate of 2.19 million vehicles for 2024, representing a 21% increase from 2023.

During the earnings release and subsequent earnings call, Tesla provided insights into the progress of its next-gen platform. Elon Musk emphasized the company’s focus on bringing this platform to market rapidly, intending to initiate production at Gigafactory Texas. Musk characterized this platform as revolutionary for vehicle manufacturing, claiming it to be more advanced than any other globally. He stated that Tesla was well into the development of its next-gen low-cost vehicle, anticipating production to commence in the second half of 2025. This aligns with previous reports, indicating Tesla’s plan to start production of a new mass-market EV, codenamed “Redwood,” by mid-2025, as revealed to suppliers.

Following the release of the report, Tesla shares experienced an almost 8% drop in premarket trading on Thursday. The combined impact of lower-than-expected Q4 earnings and a cautionary production forecast contributed to this decline in market value.