The electric vehicle manufacturer Tesla obtained a net profit of 13,786 million euros last year, 19.4% more than in 2022. The increase is partly attributed to the increase in production by 35%. Specifically, it manufactured 1,845,985 vehicles, 38% more. A figure very similar to the number of deliveries it signed, which amounted to 1.8 million. However, these gains do not convince investors, concerned about the reduction of margins and the slowdown of the company’s growth, which translates into a drop in the shares of % in the pre-opening.
Although revenue increased by 18.7% compared to the previous year, reaching $96,773 million (€88,796 million), the adjusted EBITDA (gross operating profit) fell by 13%, to $16,631 million. Compared to the last quarter of 2023, net profits soared by 115% compared to the same period in 2022 and sales grew by 3%.
The CEO of Tesla, Elon Musk, has assessed the result positively by ensuring that 2023 was “a great year, with production and delivery records and solid cash flow despite an environment with very high interest rates. “The tycoon also took advantage of the conference with analysts and the media to remember that, beyond being a car manufacturer, Tesla is an artificial intelligence and robots company, while adding that the company is focused on new projects.” exciting.”
Investors and analysts have a different view, who do not look favorably on the strategy of reducing margins to boost sales. Added to this is the strong competition from electric vehicles from Chinese firms such as BYD, which last year manufactured more than half a million cars and which surpassed Tesla in the fourth quarter of last year as the largest seller of electric vehicles in the world. . “Frankly, I think if trade barriers are not put in place, [Chinese brands] will pretty much demolish most other auto companies in the world,” Musk said.
The price-cutting tactic worked to sustain Tesla’s profits, but the company itself admits it is unlikely to continue to be as effective. In fact, it has avoided making public its income objective for this year – although it set an average increase of 50% for other years – and has anticipated that growth in vehicle volume may be “notably lower.” The reason is that the margin reduction strategy has a limit. “Tesla is recognizing that the times of year-on-year growth of 50% or even 30% to 40% are not going to return in 2024,” Seth Goldstein, an analyst at Morningstar Research, commented in an interview.
For all this, analysts predict that the automaker’s sales will increase by around 20% during the current year, up to 2.2 million vehicles, cutting the profit achieved in 2023 by almost half. Musk’s hope lies in the new low-cost model that the company will launch at the end of next year, which it hopes will bring “a second great wave of growth.” A lifeline that investors still see too far away.