- Tesla reported disappointing Q4 earnings that missed expectations, with automotive revenue only rising 1% year-over-year.
- Tesla warned that vehicle volume growth in 2024 may be much lower than 2022 as it transitions between product cycles.
- Tesla shares plunged 13% on Thursday, facing growing competition and price cuts that are weighing on profit margins.
Tesla shares fell sharply on Thursday after the electric vehicle maker reported disappointing fourth quarter earnings results and warned of slower growth in 2024. The stock was on track for its worst single-day decline since September 2020.
Q4 Earnings Miss Expectations
Tesla reported lower-than-expected revenue and earnings in the fourth quarter. Automotive revenue, a key metric, rose only 1% year-over-year to $21.6 billion. The results fell short of analyst forecasts, fueling concerns about demand for Tesla vehicles.
Cautions of Slower Growth in 2024
More worrying for investors was Tesla’s outlook. The company said vehicle volume growth in 2024 “may be notably lower” than 2022 as it transitions between product cycles. Tesla described being in between “two major growth waves,” indicating challenges ahead.
Share Price Impact
The stock plunged 13% on Thursday and was headed for a loss of 27% year-to-date. The sharp decline boosted gains for short sellers, while many analysts cut their price targets on Tesla shares.
Competitive Pressures
Tesla faces increasing competition, especially in China from companies like BYD. It has cut prices globally to sustain demand, weighing on profit margins. The competitive pressures add to uncertainty about Tesla’s growth trajectory.
Conclusion
Tesla’s weak quarterly results and cloudy outlook triggered a massive sell-off in the stock, reversing recent gains. The company faces challenges sustaining its meteoric growth amid intensifying competition in the EV market. Tesla’s ability to transition to its next generation of vehicles will be key to future performance.
