Dive Brief:
- Tesla reported an 8% year-over-year decline in Q4 revenue for its core automotive business, the company said Wednesday.
- For the full year, Tesla’s automotive revenue fell by 6% YoY to $77 billion in Q4. The company cited a reduced average selling price for its vehicles, increased investments in vehicle manufacturing capabilities, AI and other R&D projects as reasons for the revenue decline.
- Tesla's automotive revenue drop was offset by significant jumps in the company's energy generation and storage business. Overall, Tesla saw revenues increase by 2% YoY.
Dive Insight:
Tesla CFO Vaibhav Taneja said during an earnings call that cost per vehicle declined to under $35,000 in Q4 2024, which may help the company boost its margins going forward. Taneja said that Tesla ended Q4 with the lowest finished vehicle inventory in the last two years and that all of its global factories will start producing the new refreshed Model Y next month.
Taneja added that Tesla will be introducing several new products throughout 2025, including a more affordable EV model in the first half of the year as it looks to fend off rising global competition and shrinking market share, especially from EV makers in China.
However, a large portion of Tesla’s investor call was focused on its future outlook and continuous advancements in AI and autonomous driving. The company plans to make significant investments in both autonomous driving and robotics, which according to Musk will generate massive revenue for the company within the next several years.
“I see a path of Tesla being the most valuable company in the world by far,” Musk said. “And that is overwhelmingly due to autonomous vehicles and autonomous humanoid robots. So our focus is actually building towards that.”
Musk also said that Tesla will launch paid unsupervised autonomous robotaxis in Austin, Texas, by June.
Musk has been criticized for exaggerating the capabilities of Tesla’s technology, including projected timelines of its rollout of its Full Self-Driving feature. But he remains optimistic for the year ahead.
“2025 really is a pivotal year for Tesla,” said Musk. “When we look back on 2025 and the launch of unsupervised full self-driving, true real-world AI that actually works, I think we may regard it as the biggest year in Tesla history.”
