Tesla’s fourth-quarter earnings report for 2024 highlighted a mixed financial performance. The company posted $25.7 billion in revenue, a 1.9% increase from the previous year. However, net income fell sharply by 70%, coming in at $2.3 billion. This significant drop was partly due to a large non-cash tax benefit of $5.9 billion last year. Analysts had expected $27.26 billion in revenue, so Tesla’s results fell short of expectations.
For the full year, Tesla’s revenue reached $97.7 billion, marking a 6% decrease from 2023. Despite this, the company’s reliance on regulatory credit sales remained strong, contributing $692 million in Q4 alone. Over the entire year, Tesla earned nearly $2.8 billion from these sales. However, with the Trump administration signaling an end to California’s emissions program, the future of these credits remains uncertain.
Efforts to Reduce Costs and Launch New EVs
In an effort to improve its financial performance, Tesla reported reductions in the cost of producing its vehicles. The company brought the cost of goods sold (COGS) per vehicle to under $35,000, its lowest level ever. This achievement was attributed to improvements in raw material costs. Tesla also reaffirmed its goal to release more affordable EVs in the near future. A refreshed Model Y, with a starting price of $61,630, is set to be delivered in early 2025.
Tesla is also on track to begin producing new, lower-cost models by mid-2025. These vehicles will combine the company’s next-generation platform with its current manufacturing processes, aiming to provide more accessible EV options to a wider audience.
Advances in Full Self-Driving and AI
Tesla continues to push forward with its autonomous driving technology. The company revealed that its vehicles have now driven over 3 billion miles using Full Self-Driving (FSD) in its supervised mode. Tesla also significantly boosted its AI training capacity, increasing it by more than 400% in 2024.
In the coming months, Tesla plans to introduce an unsupervised version of FSD, alongside its Robotaxi service, initially in select U.S. markets. Expansion to Europe and China is also part of the roadmap. Additionally, Tesla introduced “Cortex,” a new AI training infrastructure with 50,000 GPUs, located at its Giga Texas facility. This system was crucial in improving the safety and capabilities of FSD Supervised Version 13, which offers new features like improved parking functionality.
Expanding Manufacturing Capacity
Tesla also showcased progress in expanding its manufacturing footprint. The company provided updates on its Shanghai Megapack factory, which is now complete, and its planned Semi truck production facility in Nevada, set to begin operations in 2025.
The highly anticipated Cybertruck also made an appearance in the earnings report. The vehicle is expected to qualify for the $7,500 federal EV tax credit, which would make it more affordable for consumers. Tesla also shared insights into the new technologies featured in the Cybertruck, though it noted that the vehicle’s complicated stainless steel exoskeleton would not be used in future models.
Competitive Pressure and Falling Sales
Despite these advancements, Tesla faces increasing competition, particularly in China, its largest market. For the first time in over a decade, Tesla reported a decline in sales year-over-year. This is partly due to the rise of domestic Chinese automakers that are releasing more affordable and technologically sophisticated EVs, posing a significant challenge to Tesla’s dominance in the global EV market.
Affordable EVs: The Road Ahead
Tesla has faced ongoing pressure from investors to deliver on its promise of more affordable EVs. Last year, the company scrapped plans for a $25,000 “Model 2,” prompting backlash. However, Musk has reaffirmed his commitment to the idea, though it’s unclear whether the company will develop a completely new model or simply offer a more affordable version of the Model 3.
Additionally, Tesla is planning to release a two-seat “Cybercab” priced at $30,000 in 2026, though production delays may affect its launch.
Elon Musk’s Expanding Influence
Beyond Tesla, Elon Musk’s role as a cost-cutter for the Trump administration has attracted attention. Reports suggest that Musk is actively involved in federal government restructuring, even staying at the Department of Government Efficiency headquarters in Washington, D.C., reminiscent of his early days at Tesla.
