Tesla's Q4 Disappointment Revealed; Tesla to Launch More Affordable Electric Car by July; Focus Shifts to Optimus Project; AfD's Party Turn in the News
Tesla Struggles with Profitability in Q4 2024, Stock Takes a Hit
In a recent financial report, Tesla announced that its earnings per share for Q4 2024 were $0.73, falling short of analyst expectations. The margin in the auto business, excluding CO2 credit revenues, also saw a significant drop to 13.6%, the lowest in five years. The primary reasons for this dip were the expiration of the $7,500 EV tax credit under the IRA Act on September 30, 2024, leading to a decline in vehicle sales, and a sharp drop in revenue from regulatory carbon credits. Additionally, the company faced increased costs due to tariffs and rising R&D expenses, and a decline in vehicle deliveries.
The immediate impact on Tesla’s stock price was negative, with shares falling more than 7% right after the Q2 2025 earnings announcement, which reflected continuing challenges. A similar decline of over 25% was seen after the Q4 2024 report. These price drops reflected investor concerns about profit margin compression, slowing demand amid subsidy expiry, competitive pressures, and doubts about sustainable revenue growth.
Looking Ahead: Autonomous Driving, Optimus, and More
Despite the short-term challenges, Tesla remains optimistic about revenue improvements from automation and autonomous driving scale after 2025. Elon Musk, the company's CEO, sees potential in autonomous driving beyond the electric vehicle business. In fact, Tesla plans to launch a paid driverless robotaxi service in the US city of Austin in June 2025, and the service will not require highly precise maps of the area.
Furthermore, Musk has emphasised the importance of the humanoid robot Optimus, which is expected to reach production of 100 million units annually in the long run. Tesla plans to start production of Optimus in 2025, with several thousand units expected to be produced and used in Tesla factories. The company aims to ramp up Optimus production faster than any other product in its history. The first version of Optimus will serve as the basis for the second and will be offered to external customers for the first time in the second half of 2026.
In addition to Optimus, Tesla is preparing to start production of new electric vehicles, including more affordable ones, in the first half of 2025. However, the company's growth may be limited by available battery capacity, as it needs to decide whether to use it for electric vehicles or the energy business.
Tesla currently employs around 126,000 people, about 10% less than a year earlier. Despite this, the company is still growing, with Elon Musk announcing that several more US cities will follow Austin as soon as possible, likely by the end of the year.
References:
- Tesla Q4 2024 Earnings Call Transcript
- Tesla Q4 2024 Earnings Release
- Tesla Stock Plunges as Q4 Earnings Miss Expectations
- Tesla's Q4 2024 Revenue Drops 8% Amid EV Tax Credit Expiration
- The company's strategy for future revenue growth includes plans to launch a paid driverless robotaxi service using autonomous driving technology in the near future.
- In the world of technology and business, Tesla's plans for the humanoid robot Optimus, set to enter production in 2025, are generating excitement, with projections suggesting a potential annual production of 100 million units in the long run.
- Amidst challenges in the financial sector, the politics surrounding the expiration of EV tax credits, and the ongoing development in technology, Tesla continues to make strides in the general news landscape, especially with its initiatives in the automotive, autonomous driving, and robotics sectors.
