Tesla Inc (NASDAQ:TSLA) is scheduled to release its fourth-quarter earnings after US markets close today as its shares trade down from pre-Christmas record highs after disappointing delivery numbers earlier this month.
Deliveries of 459,445 electric vehicles were below Wall Street’s worst ‘whisper numbers’ of around 500,000, and the 1.77 million deliveries for the whole year represented the first annual decline in delivery volumes in the company’s history.
Since then, the company run by Elon Musk has unveiled a refreshed Model Y in China for first deliveries in March.
Analysts at UBS said there was “nothing game changing,” but “in light of numerous BEV launches, especially by Chinese local brands, the facelift should address the issue that Model Y was increasingly perceived as aged product.”
“However, to achieve the envisaged accelerated sales growth in 2025, the new entry model is essential, in our view. For competitors in the segment, we would not see the Model Y facelift as a game changer.”
Bank of America was even more bearish, downgrading the EV maker as it sees few upcoming catalysts for further growth that could move the shares.
At the price at the time of US$490, analysts felt the stock was already trading at a level reflecting potential around future products.
This included opportunities within its core auto, the flashy but vague Robotaxi launch in October, the flashy and creepy Optimus humanoid robot and the not-flashy nor exciting energy generation and storage businesses.
BoA is concerned by the “execution risks” of these new developments, such as issues for the robotaxi, where the roll-out “will likely be slow at first and per mile costs will be elevated” and there will be a long wait before “sizable” advantages from not using drivers appear.
Jefferies analysts see income from the robotaxi model as “improbable” and are equally worried about the current “growth hiatus” that the delivery numbers highlighted.
While capacity is no longer constrained, Tesla is still “facing two years of subdued growth,” with both variable and fixed costs “challenging” and continued pressure on margins in China and elsewhere from rivals new EV models launched in recent years.
While the new closeness between Musk and returning president Donald Trump could generate some advantages in the carmaker’s home market, the political meddling by its CEO has led to growing numbers of consumers and corporate fleet managers questioning their ownership of the marque.
Of these issues, most are unlikely to be addressed in the earnings call, putting the focus on financials for the past quarter and guidance for 2025.
Street expectations are for the EV-maker to report Q4 earnings per share (EPS) of $0.77 and revenue of $27.13 billion. The consensus forecast for 2024 is for EPS of $2.43 and revenue of $99.6 billion.
Delivery growth is likely to slow further in 2025 from management’s guidance for 20% to 30%, analysts at Morningstar forecast, as they expect the new Model Q will likely take longer to ramp up, with the Cybercab predicted to be delayed past 2026 as full self-driving software takes more time to be tweaked.
Tesla shares traded hands at $393 on Wednesday morning, down 5.8% month-over-month but having gained 105% in the last 12 months.
- Updated with revised earnings forecasts, share price movement -