Tesla Earnings: Investor Focus on Growth Catalyst Amidst Delivery Challenges
Tesla's (TSLA) upcoming fourth-quarter earnings report, scheduled for release on Wednesday after the bell, coincides with investors eagerly seeking a catalyst to reignite stock growth. Despite a strong close to 2024 following Trump's election victory, Tesla has faced a 5% decline in early 2025.
Revenue and Earnings Projections
Bloomberg estimates indicate Tesla's revenue is anticipated to reach $27.21 billion, representing an 8.1% annual increase. The market consensus expects adjusted EPS of $0.75, resulting in an adjusted net income of $2.67 billion.
Vehicle Deliveries and Production
In December, Tesla reported global vehicle deliveries of 495,930 units, falling short of analyst estimates of around 510,400. Nonetheless, this figure surpassed the 463,000 delivered in Q3 and the 484,500 delivered a year ago.
Tesla delivered 1.78 million vehicles in 2024, missing analyst estimates for 1.8 million and marking the company's first year-over-year decline since its inception. This suggests that increased competition, demand fluctuations, and global economic factors may be impacting the company.
Tesla aims to introduce a lower-priced EV in early 2025, along with other new vehicles, to facilitate a return to a 50% growth rate compared to 2023. Investors and analysts eagerly await updates on the timeline for these new product offerings.
Political Impact and Regulatory Considerations
Tesla's stock surged late in 2024 following Trump's election win, with some investors speculating about potential benefits from CEO Elon Musk's relationship with the President. Initial reports suggested that the Trump administration would ease self-driving regulations, which was seen as favorable for Tesla's FSD and Robotaxi initiatives.
However, not all analysts share this optimism. Ron Jewsikow of Guggenheim Securities believes that regulatory bottlenecks at state and local levels could pose challenges to Tesla's self-driving endeavors. The White House's repeal of carbon dioxide emission targets and plans to eliminate the $7,500 federal EV tax credit have also raised concerns among some analysts about a potential decline in EV sales.
Product Developments and Challenges
To address product concerns, Tesla recently launched an updated Model Y in the US and Europe. While this new model is expected to boost sales, the controversial Cybertruck has faced its own difficulties. Tesla has offered discounts for Cybertrucks in its inventory, indicating potential weakness in demand for the EV pickup. Additionally, Tesla temporarily furloughed Cybertruck line workers at its Giga Austin factory in December.
Conclusion
Tesla's upcoming earnings report will be closely scrutinized by investors seeking insights into the company's growth prospects and the impact of various factors, including delivery challenges, political developments, and product updates. The market is eager for a catalyst that can reignite the stock's growth trajectory.