Tesla stock fell as the electric car maker warned that production growth will be “significantly lower” than in 2023

Tesla (TSLA) stock fell more than 12% on Thursday after the company reported fourth-quarter earnings late Wednesday that beat estimates and issued a downbeat production forecast for the full year.

For the fourth quarter, Tesla reported high revenue of $25.17 billion versus $25.87 billion expected; Revenue was up nearly 3% over last year. Tesla reported adjusted EPS of $0.71 versus $0.73 expected. Adjusted net income was $2.48 billion versus $2.61 billion expected by the Street.

Regarding its production for the full year, Tesla said, “The growth rate of vehicle volume may be significantly lower than the growth rate achieved in 2023, as our teams work to launch the next generation vehicle at the Gigafactory Texas,” indicating that it will be so. It doesn't reach the Street's estimate of 2.19 million for 2024, which would have been a 21% increase from 2023.

CEO Elon Musk has confirmed that the company's next-generation car will be coming in the second half of 2025.

In its earnings release and later in the earnings call, Tesla also mentioned progress on its next-generation manufacturing platform.

“We are focused on bringing the next-generation platform to market as quickly as possible, with a plan to begin production at Gigafactory Texas,” the company said. “This platform will revolutionize how vehicles are manufactured.”

“We've come a long way in developing our next-generation low-cost car,” Musk said on the earnings call. “We're really excited about this. This is a revolutionary manufacturing system, far more advanced than any other system in the world.” Explaining that the company’s current schedule may reach production of this car in the second half of 2025. This reflects a report from Reuters earlier on Wednesday that said that Tesla told suppliers that it wants to start production of a new mass-market electric car codenamed “Redwood.” “In the middle of 2025. 2025.”

Tesla's lower profitability is likely due to downward pressure on margins since Tesla began its cost-cutting efforts in late 2022. Tesla reported a fourth-quarter gross margin of 17.6% versus 18.1% estimated, a significant decline compared to last year and a sequential decline. Down from 17.9% achieved in the third quarter.

The story continues

Addresses such as car rental company Hertz abandons thousands of electric vehiclesTesla's price cuts in China, a two-week production halt in Berlin, and CEO Elon Musk's ill-timed request for more stock also affected Tesla.

Earlier this month, Tesla 484,507 births were reported in the fourth quarter, beating Street estimates of 483,173, according to Bloomberg. The figure marks an all-time record quarter for Tesla, nearly 20,000 units higher than the previous record quarter of 466,000 units delivered in the second quarter of last year.

For the year, Tesla said vehicle deliveries grew 38% year over year to 1.81 million and production grew 35% year over year to 1.85 million. While the 38% delivery growth rate was below its 50% compound annual growth rate (CAGR) target, Tesla previously said it would not meet that target due to factory closures and improvements that occurred in the third quarter.

Also worth noting are the Cybertruck deliveries. Tesla did not exceed that total in its fourth-quarter delivery update, though the company said the Cybertruck's production ramp will take longer than other models.

“[Cybertruck] Musk said on the call, repeating similar comments made last year.

Musk also addressed his comments from last week, claiming that he will need to secure greater control over Tesla if the company is to achieve its wide-ranging AI ambitions.

Musk said on the earnings call that his concern, given his current shareholding, would be that he would have “so little influence” in the future that some major shareholder might strip him of his control or make a bad decision.

“I could be voted out by some random shareholder advisory firm,” he said, citing Institutional Shareholder Services (ISS) and Glass Lewis, two major shareholder advisory firms, as examples.

“[A] “A lot of activists are infiltrating equity organizations,” Musk said, adding that he's “not looking for additional economics; I just want to be an effective steward of powerful technology.”

Pras Subramanian is a reporter for Yahoo Finance. You can follow it Twitter and on Instagram.

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