Tesla Stock Rises 4% After Pledging 2025 Growth Amid Mixed Q4 Results
Tesla (TSLA) shares climbed 4% in extended trading on Wednesday after the electric vehicle (EV) giant promised a return to growth in 2025, despite posting disappointing fourth-quarter results that capped off a challenging year. For 2024, Tesla reported a modest 1% increase in revenue to $97.7 billion, while profits fell sharply compared to the previous year.
Q4 Earnings Miss Expectations
In the fourth quarter, Tesla generated $25.7 billion in revenue, falling short of the $27.2 billion analysts had anticipated and marking just a 2% year-over-year increase. Adjusted earnings per share (EPS) came in at $0.73, below the $0.75 forecast by Wall Street, according to Bloomberg data.
Operating income dropped 23% to $1.58 billion, impacted by rising costs tied to artificial intelligence (AI) research and development (R&D) projects, as well as lower average selling prices for its vehicles. Adjusted net income, however, rose 3% to $2.6 billion.
Challenges in Auto Business
Tesla’s auto revenue declined 8% in the fourth quarter and 6% for the full year, reflecting weaker demand and increased competition. Total vehicle production fell 7% in Q4, though deliveries rose 2%. For 2024, Tesla delivered 1.78 million vehicles globally, a 1% drop from 2023 and the company’s first year-over-year decline.
CFO Vaibhav Taneja noted that Model Y production would temporarily halt across factories to facilitate a changeover, which could impact margins in the short term.
Plans for Growth in 2025
Despite the challenges, Tesla remains optimistic about its future. The company reiterated plans to launch “more affordable models” in the first half of 2025, alongside its next-generation vehicle platform. Tesla also confirmed that its purpose-built robotaxi, the Cybercab, is on track for volume production in 2026, with fleet testing of existing models set to begin later this year.
Tesla expects vehicle volumes to return to growth in 2025, driven by advancements in vehicle autonomy and the introduction of new products. CEO Elon Musk announced that paid, unsupervised Full Self-Driving (FSD) technology will debut in Austin, Texas, in June, with plans to expand to Europe and China in 2025.
Energy Storage Business Shines
While the auto business faced headwinds, Tesla’s energy storage division emerged as a bright spot. The company expects energy deployments to grow 50% year-over-year, underscoring its diversification beyond EVs.
Musk’s Vision for U.S. Manufacturing
During the earnings call, Musk emphasized the importance of revitalizing U.S. manufacturing. “In general, we need to make manufacturing cool again in America,” he said. “We have too much talent in law and finance in America, and there should be more of that talent in manufacturing.”
Musk’s comments come amid his growing influence in U.S. industrial policy, bolstered by his close ties to the Trump administration. Tesla’s stock surged in late 2024 following Trump’s election victory, though shares have moderated in 2024, down about 3% year-to-date as of Wednesday’s close.
Looking Ahead
Tesla’s pledge to return to growth in 2025 has reignited investor optimism, even as the company navigates near-term challenges. With new vehicle launches, advancements in autonomy, and a strong energy storage business, Tesla aims to reclaim its position as a leader in the EV and clean energy markets. However, the road ahead will require overcoming stiff competition, economic uncertainties, and execution risks.
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