Tesla (TSLA) pledged a return to growth in 2025 on Wednesday after fourth quarter results disappointed, capping off a year that saw revenue rise just 1% while profits fell sharply from a year ago. On the earnings call however, Tesla CEO Elon Musk said that paid, unsupervised FSD (full self-driving) is coming to Austin, Texas, in June.
Shares in the EV maker jumped nearly 4% in early trading on Thursday.
"With Unsupervised FSD expected to be available throughout the US by the end of 2025 and the rest of the world by the end of 2026 this will be a focus of the bulls," Wedbush analyst Dan Ives wrote on Thursday morning.
For the fourth quarter, Tesla reported revenue of $25.7 billion, well short of the $27.2 billion expected by analysts and up just 2% from a year ago. For the full-year 2024, revenue rose 1% to $97.7 billion.
Adjusted earnings per share came in at $0.73, less than the $0.75 Wall Street analysts were forecasting, according to Bloomberg data.
Operating income totaled $1.58 billion, down 23% from last year, while adjusted net income rose 3% to $2.6 billion.
Tesla said its operating income was negatively impacted by costs associated with artificial intelligence and other R&D projects, as well as lower average selling prices for its current vehicles.
In its shareholder presentation, Tesla said it expects its auto business to return to growth in 2025 after total auto revenues fell 8% in the fourth quarter against last year and 6% in 2024 compared to 2023. Total auto production fell 7% in the fourth quarter while deliveries rose 2%.
"In terms of both growth and profitability, results missed consensus expectations and the outlook was relatively lacking in detail — calling for a 'return to growth' for the vehicle business (vs. consensus expectation for low teens YoY growth)," Morgan Stanley analyst Adam Jonas wrote post earnings. "There was no reference to Elon Musk's prior mention of 20% to 30% volume growth for 2025."
Earlier this month, Tesla said it delivered 495,930 vehicles globally in 2024, missing analyst estimates of around 510,400. In 2024, Tesla delivered 1.78 million vehicles, a 1% drop from the prior year and marking the company's first year-over-year decline, suggesting new competition, demand, and global economic conditions may be hurting the company.
Tesla said in a Thursday filing that it expects capital spending to surpass $11 billion this year and in the next two fiscal years.
In October, the company had projected spending between $8 billion and $10 billion in 2026.
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The company also said plans for new vehicles and their production would result in "less cost reduction" than it had previously anticipated, but said using both its current and next gen platforms on the same manufacturing lines "enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times."
Tesla CFO Vaibhav Taneja said on a call with analysts that Model Y production will be shut down across its factories for a short time as the new Model Y changeover occurs and that the shutdown will impact margins.
The company reiterated that plans for new vehicles, including "more affordable models," were on track to start production in the first of 2025. Tesla also said its purpose-built robotaxi, the Cybercab, is still scheduled for volume production in 2026, with fleet-testing of existing models happening "later this year."
Tesla said vehicle volume this year is expected to return to growth due to advancements in vehicle autonomy and the launch of new products. The company plans to launch FSD in Europe and China in 2025.
Tesla's energy storage business remains a bright spot for the company, with energy deployments expected to grow 50% year over year.
The company's stock closed out 2024 on a Trump-fueled election win as Musk became one of Trump's staunchest allies during the campaign and maintains a significant role in the Trump administration.
Asked on Wednesday's call about his role in the administration and helping push forward US industrial policy, Musk said, "In general, we need to make manufacturing cool again in America ... We have too much talent in law and finance in America, and there should be more of that talent in manufacturing."
Pras Subramanian is a reporter for chof360 Finance. You can follow him on X and on Instagram.
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