Tesla faced a setback as it reported fourth-quarter revenue and profit that missed analysts’ estimates, causing its stock to slide in extended trading. The electric car manufacturer reported a 1% increase in auto sales from a year earlier, which fell short of expectations.
Despite the modest increase in auto sales, Tesla achieved a record-breaking delivery figure of 484,507 vehicles in the fourth quarter, contributing to a total of more than 1.8 million deliveries for the year 2023. This remarkable performance was attributed to aggressive price cuts implemented by the company, which helped drive sales volume.
While Tesla’s delivery numbers soared, its financial performance showed mixed results. Total revenue increased by 3% from the previous year to $24.3 billion, but the operating margin for the quarter dropped to 8.2%, down from 16% in the year-ago quarter, albeit slightly higher than the prior quarter’s 7.6%. However, net income for the quarter more than doubled to $7.9 billion from $3.7 billion a year earlier, indicating a strong bottom-line growth.
One of Tesla’s significant moves during the quarter was the commencement of Cybertruck sales to customers. The company acknowledged the manufacturing complexity of the Cybertruck and stated that its ramp-up would be longer compared to other models. Tesla revealed that it now has the capacity to manufacture over 125,000 Cybertruck vehicles annually.
Tesla’s expansion and production ramp-up efforts come with increased labor costs, particularly in the U.S. To remain competitive with automakers like General Motors, Ford, and Stellantis, where employees are represented by the United Auto Workers, Tesla recently implemented wage increases for many of its hourly factory employees in the U.S.
Despite the challenges in the fourth quarter, Tesla remains optimistic about its future prospects, especially with the growing demand for electric vehicles worldwide. The company continues to invest in its production capabilities and is committed to delivering innovative products to meet the evolving needs of the market. However, investors will be closely watching how Tesla navigates the competitive landscape and manages its costs in the coming quarters.
(Source: CNBC | Bloomberg | WSJ)
