Elon Musk's Tesla on Wednesday reported a decline in fourth-quarter gross profit margin from a year earlier as the company offered price cuts and incentives to boost demand for electric vehicles.
Tesla has warned that sales growth will slow sharply this year compared to last year.
“As our teams work to launch next-generation vehicles at Gigafactory Texas, vehicle volume growth in 2024 could be significantly lower than the growth rate achieved in 2023,” the company said in a statement. mentioned in.
Shares of the Austin, Texas-based company fell 5% in after-hours trading.
The company reported gross profit margin of 17.6% for the three months ended December, compared with 23.8% in the year-ago period and analysts' average estimate of 18.3%, according to LSEG data.
In the third quarter, Tesla posted a gross margin of 17.9%.
Record deliveries in the quarter also pushed down margins, as price cuts and costs associated with ramping up production of the new Cybertruck offset lower battery raw material costs.
Tesla has lowered prices throughout the last year. The company has cut the price of its most popular Model Y by up to 26.5% in the past year in the United States.
The company managed to meet its 2023 delivery goal of 1.8 million vehicles, even as CEO Elon Musk warned that high interest rates would hurt demand.
However, Tesla lost its position as the top EV maker in the fourth quarter due to sales to China's BYD.
Tesla's fourth-quarter sales rose 3% to $25.17 billion, the slowest pace of growth in more than three years.
Analysts on average expected revenue of $25.62 billion, according to LSEG data.
