Tesla reported a significant drop in profits for the fourth quarter of 2024

Despite a slight increase in revenue, Tesla’s financial report for the fourth quarter of 2024 was disappointing. The company reported a revenue increase of just 1.9% year-on-year, from $25.2 billion to $25.7 billion, but net income plummeted 70% to just $2.3 billion.

The company’s revenue was up just 1.9% year-on-year, from $25.2 billion to $25.7 billion, but net income plummeted 70% to just $2.3 billion.

Financial woes and falling earnings

Tesla failed to meet analysts’ expectations on any of its key metrics. What’s more, for the full year 2024, the company’s net income fell 6 percent to $7.1 billion on revenue of $97.7 billion.

The company’s net income fell 6 percent to $7.1 billion on revenue of $97.7 billion.

Sales in the automotive segment also fell 8% to $19.8 billion.

Notably, about a quarter of the company’s revenue came from the sale of regulatory credits to other automakers – that amounted to $692 million.

Causes of falling profits

One of the reasons for the declining margins is cited as growing competition and a general decline in car prices. Investors are concerned that Tesla’s aging lineup of models won’t be able to support sales in 2025.

Investors are concerned that Tesla’s aging model lineup won’t be able to support sales in 2025.

Some experts believe that betting on the expensive Cybertruck instead of developing an affordable electric car costing less than €22,500 (the so-called Model 2) also played a role. Ilon Musk’s recent controversial actions should not be discounted, which may have affected brand perception.

Some experts believe that betting on the expensive Cybertruck instead of developing an affordable electric car for less than €22,500 (called Model 2) also played a role.

Optimistic view of the future

Tesla is nevertheless confident that things will change for the better. The company is counting on the success of a new affordable electric car scheduled to be unveiled later this year, as well as an updated version of the Model Y, whose sales will begin in the first quarter of 2025.

Tesla sees additional support in the Cybertruck tax credits, which will reduce its cost in the U.S. by $7,500, and overall lower production costs thanks to lower raw material prices.

Additional support Tesla sees in the Cybertruck tax credits, which will reduce its cost in the U.S. by $7,500, and an overall reduction in production costs thanks to lower raw material prices.