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Tesla reported its Q4 FY24 earnings with mixed results, reflecting a drop in margins but strong growth in its energy and services divisions. Here’s a breakdown of the key figures and outlook:
Tesla’s adjusted earnings per share (EPS) came in at $0.73, slightly missing the expected $0.75. Revenue for the quarter totaled $25.71 billion, falling short of the $27.21 billion forecast. This resulted in a decrease in automotive revenue. The gross margin stood at 16.3%, which was a significant drop from the previous year’s 18.96%, while operating margin fell to 6.2%, a drop of 204 basis points from the prior year.
In terms of revenue breakdown, the automotive segment generated $19.8 billion, missing the $21.51 billion estimate and reflecting an 8% year-over-year decline. On the positive side, energy generation and storage revenues surged to $3.06 billion, surpassing expectations of $2.68 billion and marking a 113% increase compared to last year. Tesla’s services and other revenue reached $2.85 billion, slightly above the $2.80 billion estimate, up by 31% from the previous year.
Operationally, Tesla delivered a total of 495,570 vehicles in Q4, a modest 2% increase year-over-year. Of these, 471,930 were Model 3/Y vehicles, also up 2% YoY. Other models contributed 23,640 deliveries, a 3% rise from last year. Production numbers totaled 459,445 vehicles, showing a 7% decline YoY. However, Tesla achieved a significant milestone in reducing its cost of goods sold (COGS) per vehicle to less than $35,000, largely due to improvements in raw material costs. The company also set a new record for energy storage deployments, reaching 11 GWh, an impressive 244% increase YoY.
Regarding cash flow, Tesla reported operating cash flow of $4.81 billion, up 10% from last year, while free cash flow decreased by 2% to $2.03 billion. The company’s cash and equivalents grew by 26%, reaching $36.6 billion.
Looking ahead, Tesla reiterated its belief that the Model Y will become the best-selling vehicle globally in 2024. The company also provided updates on its long-term plans, including the anticipated launch of its Cybercab Robotaxi, which will follow an innovative “unboxed” manufacturing strategy, with mass production set for 2026. Tesla expects vehicle volume growth to resume in 2025, contingent on factors such as progress in autonomy, production ramp-up at its factories, and macroeconomic conditions.
Tesla also sees energy storage deployments growing at least 50% year-over-year in 2025. The company expects the Cybertruck to qualify for the IRA consumer tax credit, while the continued development of Full Self-Driving (FSD) technology aims to surpass human safety standards.
Tesla’s average cost of goods sold reached a record low in Q4 2024.
CEO Elon Musk remained optimistic about Tesla’s future, stating that the company continues to scale production and invest in autonomy. While margins were impacted in Q4, he emphasized that long-term growth will be driven by AI, energy, and next-generation vehicle innovations. Musk also expressed his vision of Tesla becoming the most valuable company in the world, suggesting that by 2025, the launch of Unsupervised FSD could be regarded as the most important year in Tesla’s history.
Additionally, Tesla plans to ramp up production of its Optimus robot to 10,000-100,000 units per month by 2025, with external deliveries expected in the second half of 2025 and potential partnerships with other companies by 2026.
Tesla has confirmed it will offer a free hardware upgrade for owners with the Full Self-Driving (FSD) package who have Hardware 3 (HW3) in their vehicles. Elon Musk said that unsupervised FSD may not be possible with HW3, so an upgrade will be provided if necessary to support future FSD features, including robotaxi services. This upgrade will only be for FSD buyers, not subscribers, and might not involve a full replacement of HW3 but rather a custom solution. Although HW3 vehicles are getting fewer updates compared to newer HW4 vehicles, Tesla is still updating older cars with software like FSD v12.6. The exact details and timeline of the upgrade are not clear, but FSD owners with HW3 are assured their vehicles will be supported.
Elon Musk believes Tesla has a chance to become the most valuable company in the world, even worth more than the next five biggest companies combined.
Tesla plans to produce between 10,000 and 100,000 Optimus robots per month, selling them for $20,000 each. The company expects to start delivering these robots in the second half of 2025 and may begin selling them to other businesses by late 2026.
Tesla also expects to spend more than $11 billion on capital expenditures (CapEx) in 2025, exceeding previous estimates of $10.88 billion. This spending is expected to remain above $11 billion in 2026 and 2027 as well.
