Tesla Pledges Return to Growth in 2025 After Q4 Disappoints
Despite a lackluster 2024 with revenue increasing only 1%, Tesla (TSLA) aims to reignite growth in 2025. This follows disappointing fourth-quarter results that fell short of analyst expectations.
Q4 Results Trail Estimates
In the fourth quarter, Tesla reported revenue of $25.7 billion, below the $27.2 billion forecast. Adjusted earnings per share reached $0.73, lower than the predicted $0.75. Operating income declined 23% year-over-year to $1.58 billion, while net income edged up 3% to $2.6 billion.
Autonomous Driving Focus
On the earnings call, CEO Elon Musk announced the implementation of unsupervised FSD in Austin, Texas, in June. This advanced feature is expected to become available nationwide by 2025 and globally by 2026.
Auto Business Growth Projections
Tesla anticipates a return to growth in its auto business in 2025. This follows a decline in 2024, with revenue dropping 6% year-over-year. Production fell 7% in the fourth quarter, while deliveries increased 2%.
Capital Spending and New Vehicles
The company plans to increase capital spending to over $11 billion annually for the next three fiscal years. Tesla is also working on new vehicle models, with production expected to reduce cost reductions.
Energy Storage Growth
Tesla's energy storage business remains strong, with deployments projected to increase 50% year-over-year. This adds to the company's growth prospects.
Investment Thesis
Analysts anticipate a focus on FSD availability as a catalyst for growth. Tesla's plans for new vehicle models and energy storage expansion also support the company's long-term prospects.