New York (AFP) – Tesla reported lower than expected profits Wednesday, citing declining vehicle prices as a factor as it projected a return to volume growth in 2025. Elon Musk’s electric car company reported fourth-quarter profits of $2.3 billion, down 71 percent from the year-ago quarter, where profits were boosted by a one-time tax benefit. Revenues rose two percent to $25.7 billion, also missing analyst estimates.
The results — the first since the return of Musk ally Donald Trump to the White House — capped a mixed year for Tesla in which Musk’s big bet on US electoral politics was countered by profit pressures as Tesla’s streak of annual car volume growth came to an end. Full-year auto sales fell one percent to just under 1.8 million vehicles. Tesla has been confronted by intensifying EV competition in leading markets, including China and the United States, where General Motors and Ford have introduced more models.
Another factor has been lower than expected volumes from the Cybertruck, Musk’s futuristic auto giant that has won cheers from Tesla fans and jeers from critics. But Tesla expects growth in 2025. “With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025,” Tesla said. “The rate of growth will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment.”
The company also confirmed plans to unveil new, more affordable vehicles in 2025 and described as on track the launch this year of a new robotaxi venture in parts of the United States. Tesla watchers have been keen to hear more details from Musk on new vehicles and the latest projections on production. In October, Musk said he expected auto sales to increase 20 to 30 percent in 2025.
There is also much curiosity about how Musk’s alliance with Trump — part of the billionaire’s increasingly assertive advocacy on behalf of far-right politicians worldwide — will affect Tesla. But among the deluge of opening-day White House executive orders, Trump last week took direct aim at EVs, vowing to undo policies that disadvantage gasoline-powered cars and signaling a potential rollback of US tax credits for EVs. Yet shares of Tesla have surged since the election. Market watchers believe Tesla could benefit from new policies from Washington to promote autonomous driving, which Musk has described as a potentially huge market for his company.
Thus far, Tesla driver-assistance programs like “autopilot” and “full self-driving” (FSD) have lagged other companies, such as Waymo, in achieving driverless functionality without human supervision. On Wednesday, Tesla described 2025 as a “seminal” year for the company in terms of the venture. “FSD (Supervised) continues to rapidly improve with the aim of ultimately exceeding human levels of safety,” Tesla said. “This will eventually unlock an unsupervised FSD option for our customers and the Robotaxi business, which we expect to begin launching later this year in parts of the US.” Shares of Tesla rose 3.3 percent in after-hours trading.
© 2024 AFP
