Tesla Q4 Earnings Preview: Catalyst Needed to Jumpstart Stock

Tesla's (TSLA) highly anticipated Q4 earnings report, scheduled for release after the bell on Wednesday, arrives amidst investor expectations for a catalyst to reignite stock growth. Despite a year-end surge fueled by Trump's election win, Tesla's stock has faced a 5% decline year-to-date.

Revenue and Earnings Expectations

Analysts anticipate Tesla to report revenue of $27.21 billion (per Bloomberg), an 8.1% increase year-over-year. From a profitability standpoint, the Street forecasts adjusted EPS of $0.75, equating to adjusted net income of $2.67 billion.

Vehicle Deliveries and Production

Tesla recently announced global vehicle deliveries of 495,930 units, slightly below analyst estimates of 510,400. Nevertheless, this figure surpasses both last quarter's deliveries of 463,000 and the year-ago period's 484,500.

In 2024, Tesla delivered 1.78 million vehicles, missing analyst projections of 1.8 million and falling short of the 1.8 million delivered in 2023. This marks the company's first year-over-year decline, indicating potential factors such as new competition, demand fluctuations, and global economic challenges.

To combat slowing demand, Tesla plans to introduce a lower-priced EV in early 2025, alongside other new vehicles aimed at returning to a 50% growth rate compared to 2023. Investors eagerly await updates on the timeline for these new offerings.

Trump's Impact and Regulatory Concerns

Tesla's stock surged late in 2024 following Trump's election victory, with some investors anticipating that CEO Elon Musk's close ties with Trump would benefit the company. However, concerns have emerged regarding the potential impact of Trump's policies on electric vehicle sales, including the elimination of a federal EV tax credit.

Furthermore, while easing self-driving rules under the Trump administration has been viewed as a positive for Tesla, industry experts emphasize that regulatory hurdles at the state and local levels remain a challenge for the development of self-driving vehicles.

Model Y and Cybertruck Updates

To address product concerns, Tesla has recently released an updated version of the Model Y in the US and Europe, bringing renewed excitement to its lineup. However, the Cybertruck has faced challenges, with Tesla offering discounts on inventory models and furloughing workers at its Giga Austin factory.