Tesla (TSLA) Q4 2024 earnings results and conference call transcript
Tesla's Q4 2024 earnings release is out. Here are all of the details from the quarter.
Tesla just released its Q4 2024 earnings results, and the stock is reacting in after-hours trading. The EV company reported earnings-per-share (EPS) of $0.73/share and revenues of $25.7 billion, missing Wall Street analyst estimates of $0.76/share and $27.3 billion.
Listen to the Tesla (TSLA) Q4 2024 earnings call
Tesla (TSLA) Q3 2024 Earnings Release
Check out the full TSLA Q4 2024 earnings report on the Tesla Investor Relations website.
Highlights
Profitability
- $7.1B GAAP operating income in 2024; $1.6B in Q4
- $7.1B GAAP net income in 2024; $2.3B in Q4 incl. $0.6B mark-to-market gain on digital assets
- $8.4B non-GAAP net income1 in 2024; $2.6B in Q4
Cash
- Operating cash flow of $14.9B in 2024; $4.8B in Q4
- Free cash flow of $3.6B in 2024; $2.0B in Q4
- $7.5B increase in our cash and investments3 in 2024 to $36.6B
Operations
- Increased AI training compute by over 400% in 2024
- Over three billion miles driven cumulatively on FSD (Supervised) as of January
- Completed construction of Megafactory Shanghai
Summary
Q4 was a record quarter for both vehicle deliveries and energy storage deployments. We expect Model Y to once again be the best-selling vehicle, of any kind, globally for the full year 2024, and we have made it even better, with the New Model Y now launched in all markets. In 2024, we made significant investments in infrastructure that will spur the next wave of growth for the company, including vehicle manufacturing capabilities for new models, AI training compute and energy storage manufacturing capacity.
Affordability remains top of mind for customers, and we continue to review every aspect of our cost of goods sold (COGS) per vehicle5 to help alleviate this concern. In Q4, COGS per vehicle reached its lowest level ever at <$35,000, driven largely by raw material cost improvement, helping us to partially offset our investment in compelling financing and lease options.
The Energy business achieved another record in Q4 with its highest-ever gross profit generation. Construction of Megafactory Shanghai was completed in December and will begin ramping this quarter. Powerwall deployments achieved another record quarter as we continue to ramp Powerwall 3 production and launch in additional markets.
2025 will be a seminal year in Tesla’s history as FSD (Supervised) continues to rapidly improve with the aim of ultimately exceeding human levels of safety. This will eventually unlock an unsupervised FSD option for our customers and the Robotaxi business, which we expect to begin launching later this year in parts of the U.S. We also continue to work on launching FSD (Supervised) in Europe and China in 2025.
Revenue
Total revenue increased 2% YoY in Q4 to $25.7B. YoY, revenue was impacted by the following items:
- growth in Energy Generation and Storage and Services and Other (+)
- growth in vehicle deliveries (+)
- higher regulatory credit revenue (+)
- reduced vehicle average selling price (ASP) (excl. FX impact), due to pricing, attractive financing options and mix
Profitability
Our operating income decreased 23% YoY to $1.6B in Q4, resulting in a 6.2% operating margin. YoY, operating income was primarily impacted by the following items:
- reduced S3XY vehicle ASP (-)
- increase in operating expenses driven by AI and other R&D projects (-)
- growth in Energy Generation and Storage and Services and Other gross profit (+)
- lower cost per vehicle, including lower raw material costs partially offset by lower fixed cost absorption from production decrease YoY (+)
- higher regulatory credit revenue (+)
Cash
Quarter-end cash, cash equivalents and investments in Q4 was $36.6B. The sequential increase of $2.9B was primarily the result of positive free cash flow of $2.0B.
Outlook
Volume
With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025. The rate of growth will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment. We expect energy storage deployments to grow at least 50% year-over-year in 2025.
Cash
We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses. Furthermore, we will manage the business such that we maintain a strong balance sheet during this uncertain period.
Profit
While we continue to execute on innovations to reduce the cost of manufacturing and operations, over time, we expect our hardware related profits to be accompanied by an acceleration of AI, software and fleet-based profits.
Product
Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025. These vehicles will utilize aspects of the next generation platform as well as aspects of our current platforms and will be produced on the same manufacturing lines as our current vehicle line-up.
This approach will result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times. This should help us fully utilize our current expected maximum capacity of close to three million vehicles, enabling more than 60% growth over 2024 production before investing in new manufacturing lines.
Our purpose-built Robotaxi product – Cybercab – will continue to pursue a revolutionary “unboxed” manufacturing strategy and is scheduled for volume production starting in 2026.
Tesla (TSLA) Q4 2024 Earnings News Highlights
Check out all of our Tesla news coverage:
- Tesla (TSLA) Q4 2024 earnings results miss EPS and revenue expectations
- Elon Musk: Tesla (TSLA) could be valued at more than the next five largest companies combined
- Tesla (TSLA) will launch unsupervised FSD in Austin in June
- Tesla (TSLA) acknowledged a $600 million benefit from Bitcoin holdings appreciation in Q4 2024
Tesla (TSLA) Q4 2024 conference call transcript
Tesla's earnings results conference call is set to kick off at 5:30 p.m. ET. Keep an eye on this article for a transcription of the earnings call right here.
- Conference call starts at 5:34 p.m. ET.
- Elon's opening remarks start with a congratulations to Tesla team on record deliveries
- Model Y was the best-selling vehicle in 2024
- Focused on maximizing manufacturing and focused on FSD dev
- Advancements made in 2024 in robotics
- Such a scale of benefit that is difficult to understand
- see a path to Tesla being the world's largest company by far
- there is a path where Tesla is worth more than the next five companies combined
- a difficult but achieveable path
- tied to robots and autonomous vehicles
- setting up for an epic 2026
- and ridiculously good 2027 and 2028
- very few people understand the value of FSD and ability to monetize the fleet
- seeing exponential progress in FSD
- Tells people to try FSD if they remain skeptical
- keeps talking about the unlockable value increase of FSD for existing Tesla vehicles
- People who look in the rearview mirror are looking for past precedent, but I don't think there is one
- The reality of autonomy is upon us
- we are working hard to increase volumes
- constrained on battery supply
- things are really going to go ballistic next year
- Our Q4 vehicle safety report shows gigantic benefits for drivers with FSD on
- Hypes Version 14
- the training needs for Optimus are probably 10x what is needed for the car
- a humanoid robot has probably a thousand times more uses
- that doesn't mean the training scales by a thousand, but it's probably 10x
- We're obviously going to train Optimus to do enough tasks
- cost of training is dropping dramatically over time
- it is one of those things where long-term Optimus could unlock $10 trillion of revenue
- the future's going to be incredibly different than the past
- unbelieveable inflection point in human history
- going to be launching unsupervised FSD in Austin in June
- Teslas will be in the wild, with no one in them, in Austin this June
- FSD is literally five/six months away
- While we are putting our toe in the water gently at first, our solution is a generalized solution that does not require mapping
- safety of drivers is still the goal
- Optimus in use at Tesla factoires will inform design 2 of the robots
- going to ramp Optimus production faster than anything ever before at Tesla
- Hypes precision of the Optimus design process
- Energy storage is a big deal
- It's going to become incredibly important
- We are building a third factory for stationary battery storage
- Challenge here to make sure we aren't robbing from one pocket to pay the other
- overall the demand for total gigawatt hours of batteries will grow in very big way over time
- in conclusion, 2025 really is a pivotal year for Tesla
- Launch of real world AI in unsupervised FSD
- May be regarded as the biggest year in Tesla history
- There is no company in the world that is as good at real world AI as Tesla
- Elon opening remarks ends
- CFO commentary starts
- ended Q4 with the lowest inventory in 2 years
- effect of lower prices
- hit a new record for deliveries in the greater China market
- journey of cost reduction continues
- average cost per car down to $35k
- touts Model Y
- still on track to launch a more affordable model in 2025
- most compelling lineup in the industry and it set to get better
- touts total cost of ownership
- A lot of uncertainty on tariffs
- AI R&D large part of increased capital expenditures
- 2025 operating expenses will increase
- $600 million benefit from Bitcoin
- investor questions start
- FSD in Cali and Texas?
- Elon says unsupervised FSD will launch in California
- Many regions in the US by the end of the year
- Elon complains about the media focus on FSD accidents compared to other vehicles
- the only thing holding us back is an excess of caution
- any companies want to license FSD?
- Elon says Yes and then chuckles
- The best way to know what to do is to take one of our cars apart
- next question is Optimus now design-locked for 2025 production?
- Elon - no
- We are redesigning the train as it is rolling down the track
- as we redesign the track and train station
- we have the best team of humanoid robotics engineers in the world
- Tesla Optimus price and release date?
- Focus on using Tesla internally at the factory
- doing tasks nobody wants to do
- maybe delivering Optimus until second half of 2026
- Semi factory update?
- Prepping for mechanical installation in Reno
- High volume version of Semi will begin production late 2025 and ramp in 2026
- How will hardware 3 upgrades affect the roll out of FSD?
- Elon dodges it
- the honest answer is that we are going to have to upgrade hardware 3 for people who paid for FSD
- Now I am kinda glad that not many people bought the FSD package
- Has Tesla given up on the solar roof project?
- Elon - No, cut off by Mike
- Mike reaffirms company's focus
- reduced SKU count
- shifting focus from first party installation
- supplying product to the roofing industry instead of installing the roofs themselves
- new houses are new roofs, solar roofs make a lot of sense
- it is a premium product
- I think it looks really cool
- combined with the Tesla Powerwall, you can be self-sufficient
- and your roof looks awesome
- Get the solar roof and powerwall, your family's life might depend on it
- what technical breakthroughs will define v 14 of FSD
- nothing really concrete mentioned
- analyst questions start now
- Bernstein starts
- question about Tesla's share price
- What are you pushing the Tesla management team to do now to realize the value you described for the company?
- Elon - we are working on perfecting real world AI
- spend a lot of time with the Tesla AI team and the Optimus team
- Elon blames the media for only focusing on the times he is late
- Factory completion has been ahead of schedule, as opposed to vehicle releases and FSD promises
- I think we will have unsupervised FSD in almost every market, limited by regulatory approval by next year - Elon
- next question from Adam Jonas of Morgan Stanley
- Elon, you have said in the past about LIDAR that it is a crutch for FSD, do you still feel that way?
- Elon - Yes
- We even have a radar in the car and we turned it off
- People think you're crazy
- Elon - obviously humans drive without shooting lasers out of their eyes
- a digital equivalent of eyes and a brain is Tesla's focus since the roads were designed for that
- Generalized solution for FSD remains vision based
- AI question from Jonas, how confident are you that the US can make good on your physical real world AI progress expectations?
- At Tesla, obviously we think manufacturing is cool
- In general, we need to make manufacturing cool again
- next question
- Question on deploying robotaxis in June in Austin
- Will I be able to try unsupervised in Austin in my car, or will it be your fleet testing it?
- It will be our fleet - Elon
- as shortly as possible it will release in other cities in America
- it's probably next year when people will be able to add their vehicles to the fleet
- Are you working on an eyes off FSD experience?
- Yes, we need to be very confident that the probability of injury is low before drivers can check their email or text messages
- People will go to manual driving to check messages and then go back on autonomous mode afterwards
- that is significantly less safe than letting people check their messages without the computer yelling at them
- this will be a problem for a few more months
- we want to prove to ourselves and regulators that the car is unequivocally safer in FSD than regular driving mode
- one crash for every 5.9 million miles driven
- 8.5 times safer according to their internal testing
- Last question
- sustainable transport question about Trump's regulatory headwinds for EV uptake?
- what is your view on the right policy in the US?
- I think that sustainable transport is inevitable - Elon
- All transport will be autonomous/electric
- follow up
- you had made a comment that you would be willing to sell cars at no margin, can you talk about the efforts on FSD, how we should think about your desire to more cars on the market?
- Elon - we have millions of cars out there...
- CFO - how do we marry our future growth prospects with FSD?
- How much more aggressively would you want to sell your cars?
- Elon - right now the constraint we are trying to solve is battery supply
- call comes to its merciful end at 6:41 p.m. ET
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.
Full Disclosure:
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long Tesla via TSLA shares
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