Tesla has faced a turbulent year, with its brand value plummeting by $15 billion in 2024. The decline is attributed to several factors, including an aging lineup of electric vehicles (EVs) and controversial political rhetoric by CEO Elon Musk. In the fourth quarter of 2024, Tesla reported deliveries of 495,570 vehicles, a decrease compared to the previous year. This decline contributed to the company's first annual drop in full-year deliveries, which totaled approximately 1.8 million vehicles.
Tesla's financial performance in the fourth quarter revealed mixed results. Revenue increased marginally by 2%, reaching $25.71 billion from $25.17 billion a year earlier. However, automotive revenue fell by 8% to $19.8 billion, down from $21.56 billion in the same quarter last year. The company's operating income also saw a significant decrease, dropping 23% year-over-year to $1.6 billion.
Tesla's financial earnings did not meet market expectations, with earnings per share at 73 cents, adjusted, compared to the anticipated 76 cents. The company identified decreased average selling prices across its Model 3, Y, S, and X lines as a significant contributor to this shortfall. Despite plans to launch a robotaxi business, Tesla has yet to produce robotaxis, impacting its growth prospects in autonomous vehicle technology.
In response to these challenges, Tesla plans to review every aspect of its cost of goods sold per vehicle to enhance affordability for its EVs. The company aims to "begin launching" its driverless ride-hailing business later this year in select parts of the U.S. This move has sparked considerable interest among investors, with over 100 questions submitted regarding Tesla's autonomous vehicle technology plans.
While Tesla navigates these operational hurdles, CEO Elon Musk continues to wield influence in other arenas. He is currently leading the president's new government efficiency advisory board. This position has bolstered investor confidence, resulting in a sharp rally in Tesla's stock price since Trump's victory in November. Investors are optimistic that Musk's involvement will lead to favorable policies and reduced oversight of his companies.
Despite these developments, Tesla's operating margin for the quarter contracted to 6.2%, down from 8.2% during the same period a year earlier. This contraction reflects the company's ongoing struggle to balance growth ambitions with financial sustainability.