Tesla (TSLA) Q4 2024 earnings results and conference call transcript

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Tesla has recently disclosed its Q4 2024 financial results, causing a response in post-market trading. The electric vehicle firm announced earnings per share (EPS) of $0.73 per share and revenues totalling $25.7 billion, falling short of analyst predictions of $0.76 per share and $27.3 billion.

Listen to the Tesla (TSLA) Q4 2024 earnings call

https://player.twitch.tv/

Tesla (TSLA) Q3 2024 Earnings Release

Check out the full TSLA Q4 2024 earnings report on the Tesla Investor Relations website.

Highlights

Profitability

  • $7.1B GAAP operating income in 2024; $1.6B in Q4
  • $7.1B GAAP net income in 2024; $2.3B in Q4 incl. $0.6B mark-to-market gain on digital assets
  • $8.4B non-GAAP net income1 in 2024; $2.6B in Q4

Cash

  • Operating cash flow of $14.9B in 2024; $4.8B in Q4
  • Free cash flow of $3.6B in 2024; $2.0B in Q4
  • $7.5B increase in our cash and investments3 in 2024 to $36.6B

Operations

  • Increased AI training compute by over 400% in 2024
  • Over three billion miles driven cumulatively on FSD (Supervised) as of January
  • Completed construction of Megafactory Shanghai

Summary

2023 Q4 marked a historic high for both automobile deliveries and energy storage installations. We anticipate that the Model Y will lead as the top-selling vehicle worldwide in 2024, having introduced an improved version, the New Model Y, which is now available in all markets. In 2024, we’ve boosted our expansion by investing heavily in infrastructure, focusing on expanding vehicle production for new models, enhancing AI training capabilities, and increasing energy storage manufacturing capacity, preparing us for future growth.

For our customers, affordability stays a primary focus, so we’re constantly analyzing the costs associated with each vehicle (COGS) to address this matter. In the last quarter, COGS per vehicle dropped to an all-time low of under $35,000, mainly due to reduced raw material costs. This cost reduction significantly contributed towards balancing our investments in attractive financing and leasing offers.

In the fourth quarter, the energy sector set a new benchmark with its highest-ever profit generation from gross sales. The Megafactory Shanghai was finished in December and will gradually increase operations this coming quarter. We also saw another record quarter for Powerwall deployments as we ramp up production and launch of Powerwall 3 in additional markets.

2025 marks a pivotal moment for me as a Tesla enthusiast, with Full Self-Driving (Supervised) technology making significant strides towards surpassing human safety levels. This advancement will open the door to an unsupervised FSD option for our customers and kickstart the Robotaxi business, slated to debut in some U.S. regions this year. Additionally, we’re pushing forward with bringing FSD (Supervised) to Europe and China by 2025.

Revenue

Total revenue increased 2% YoY in Q4 to $25.7B. YoY, revenue was impacted by the following items:

  • growth in Energy Generation and Storage and Services and Other (+)
  • growth in vehicle deliveries (+)
  • higher regulatory credit revenue (+)
  • reduced vehicle average selling price (ASP) (excl. FX impact), due to pricing, attractive financing options and mix

Profitability

As a devoted follower, I’m sharing the latest financial update: In the fourth quarter, our operational income dropped by 23% compared to last year, landing at approximately $1.6 billion. This translated into an operating margin of 6.2%. The main factors that affected our YoY (Year over Year) operational income were:

  • reduced S3XY vehicle ASP (-)
  • increase in operating expenses driven by AI and other R&D projects (-)
  • growth in Energy Generation and Storage and Services and Other gross profit (+)
  • lower cost per vehicle, including lower raw material costs partially offset by lower fixed cost absorption from production decrease YoY (+)
  • higher regulatory credit revenue (+)

Cash

At the end of Q4, we found ourselves sitting on a tidy sum of approximately $36.6 billion, which included cash, equivalents, and investments. Remarkably, this figure represented an increase of around $2.9 billion compared to the previous quarter. This substantial boost was largely due to a robust positive free cash flow of about $2.0 billion that we generated during this period.

Outlook

Volume

In 2025, we anticipate a resurgence in the automotive industry due to technological advancements in self-driving vehicles and new product launches. The speed of this growth will hinge on several elements, such as our pace in autonomous driving development, manufacturing output at our facilities, and the overall economic climate. Moreover, we project that energy storage installations will expand by at least 50% annually in 2025.

Cash

1) Our finances are robust enough to cover our product development plans, future growth projects, and regular costs. Moreover, we’re committed to preserving financial stability by managing our operations carefully during these unpredictable times, ensuring a healthy balance sheet.

Profit

As we progress with implementing innovative strategies aimed at lowering production and operational costs, it’s likely that we will see a growth in profit margins from our hardware products. Additionally, this growth could be boosted by the increasing returns from artificial intelligence, software, and our fleet-related ventures over time.

Product

The development of new automobiles, which include cost-effective options, is continuing according to schedule, with production set to begin in the first half of 2025. These cars will incorporate elements from our future platform generation as well as aspects from our existing platforms, and they will be manufactured on the same production lines as our current vehicle assortment.

By adopting this strategy, we’ll see a lower reduction in costs compared to initial predictions, but it offers the advantage of carefully expanding our vehicle output with minimal capital expenditure in economically challenging periods. This should maximize our capacity to produce nearly three million vehicles, representing over 60% growth from our 2024 production levels, without requiring additional manufacturing facilities upfront.

Moving forward, our specially designed robotaxi model known as Cybercab will persistently follow an innovative “unpackaged” production method, with mass production set to begin in the year 2026.

Tesla (TSLA) Q4 2024 Earnings News Highlights

Check out all of our Tesla news coverage:

  • Tesla (TSLA) Q4 2024 earnings results miss EPS and revenue expectations

Tesla (TSLA) Q4 2024 conference call transcript

The conference call discussing Tesla’s earnings results will commence at 5:30 PM Eastern Time. Stay tuned to this post as we provide a live transcript of the call.

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Remember, this article is for learning purposes only; it isn’t financial advice. Always think about your own investment timeline, risk preferences, and get professional advice from a financial expert before using this information.

Full Disclosure:

As of this article’s publication, the main stakeholder at Shacknews, Asif A. Khan, along with his relatives and Virtue LLC, held these roles:

1. Asif A. Khan was the primary shareholder.
2. His family members had certain positions within the company.
3. Virtue LLC also held specific positions in the organization.

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2025-01-30 01:28