Tesla Plans for Growth Return in 2025 After Disappointing Q4

Tesla (TSLA) announced its intention to resume growth in 2025 after reporting lackluster fourth-quarter results. This follows a year marked by a mere 1% revenue growth and a significant decline in profits. TSLA shares gained nearly 3% in pre-market trading on Thursday.

Fourth Quarter Performance

Tesla reported fourth-quarter revenue of $25.7 billion, falling short of analysts' expectations of $27.2 billion and showing a meager 2% increase year-over-year. Full-year 2024 revenue reached $97.7 billion, representing a 1% growth. Adjusted earnings per share stood at $0.73, below Bloomberg data's estimate of $0.75.

Operational and Financial Highlights

Operating income totaled $1.58 billion, a 23% decrease compared to the previous year. However, adjusted net income rose 3% to $2.6 billion. Tesla attributed its lower operating income to expenses associated with AI and R&D projects, as well as reduced average selling prices for its vehicles.

Outlook for 2025 and Beyond

Tesla projects its auto business to return to growth in 2025, despite a decline in total auto revenues by 8% in Q4 and 6% in 2024. Total auto production decreased by 7% in Q4, while deliveries increased by 2%. Tesla also plans to increase capital spending to over $11 billion over the next three fiscal years.

The company anticipates the launch of new vehicles, including more affordable models, in 2025. Additionally, its Cybercab robotaxi is scheduled for volume production in 2026. Vehicle volume is expected to return to growth due to advancements in vehicle autonomy and the introduction of new products.

Tesla's energy storage business remains a positive aspect, with energy deployments projected to grow by 50% annually.

Role in the Trump Administration

CEO Elon Musk emphasized the need to revitalize manufacturing in the United States during the earnings call. He also highlighted his role in the Trump administration, stating that the focus should shift from law and finance towards manufacturing to harness untapped talent in America.