Tesla’s 2024 wasn’t a banner year, marked by declining sales and profits, but the electric vehicle maker is betting on a brighter 2025. During a recent earnings call, Tesla outlined plans for more affordable EVs and significant advancements in its self-driving technology. A key achievement highlighted was a reduction in the average cost of vehicle production to under $35,000.
Despite this progress in manufacturing costs, Tesla’s financial performance in 2024 revealed challenges. For the first time in over a decade, global sales decreased, impacting earnings. Fourth-quarter revenue fell short of Wall Street projections, reaching $25.707 billion compared to the expected $27.2 billion. Net income for the fourth quarter also plummeted by 71% to $2.3 billion.
Looking at the full year, Tesla’s profitability suffered, with net income dropping to $8.4 billion, a 23% decrease from 2023 and a substantial 40% decline from the record $14.1 billion profit in 2022. However, total revenue for 2024 showed a slight increase, reaching $97.7 billion, a modest 1% rise from the previous year’s record.
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The most anticipated news from the earnings call centered around Tesla’s 2025 plans. The company intends to introduce more affordable EV models in the first half of the year. While specific details remain undisclosed, these vehicles are expected to utilize a combination of next-generation and current platform components and will be manufactured on existing production lines. This approach, while potentially limiting cost reductions compared to previous expectations, is designed to increase production volume efficiently during uncertain economic times. This strategy also leaves room for speculation about models like the rumored Model Q, potentially priced around $30,000.
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Beyond affordability, Tesla is focusing on advancing its Full Self-Driving (FSD) technology. Elon Musk announced plans to launch a paid, unsupervised FSD service in Austin, Texas, starting in June. The specifics of this service, including vehicle ownership and pricing, were not disclosed. Musk expressed hope for expanding this service to other US cities by the end of the year, contingent on demonstrating safety in Texas and securing regulatory approval. He also claimed that several car manufacturers have expressed interest in licensing Tesla’s FSD system, though no further details were provided.
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