Tesla stock fell more than 9% in early trading on Wall Street on Thursday, a day after the world's most valuable electric car maker reported flat fourth-quarter profits and warned of growth in 2024. A total of $50 billion was blown away. It can be significantly lower. ”
Chief Executive Officer Elon Musk, who owns a 13% stake in the company and is demanding an increase to 25%, said price competition from Chinese rivals was squeezing profits.
On Wednesday, Tesla reported a gross profit margin of 17.6% for the three months ended December, compared with 23.8% in the year-ago period, below the average analyst estimate of 18.3%, according to LSEG data. Ta.
Automotive gross margin, which excludes regulatory credits (a number to watch), fell to 17.2% from 24.3% a year earlier, although it improved from 16.3% in the third quarter.
Mr. Musk announced plans to begin production of a new mass-market electric car, codenamed Redwood, in mid-2025, according to four people familiar with the matter, two of whom said the model would be a compact crossover. It is explained that.
“We're effectively sleeping on the line,” Musk said, referring to the Tesla factory in Texas where the new models will first be produced.
Other plants outside of Mexico and North America will be followed later this year, he said.
Mr. Musk has long whetted the appetite among fans and investors for affordable electric cars and self-driving robotaxis, which are expected to be built on the next generation of cheap electric vehicle platforms.
These models, including an entry-level $25,000 car, will allow it to compete with cheaper gas-powered cars and a growing number of cheaper EVs, including those made by China's BYD.
During an earnings call with Tesla investors on Wednesday, Musk praised BYD and other Chinese EV makers as one of the “most competitive car companies in the world” and said Western governments would not erect trade barriers. As long as these companies do so, he said, they will become “huge” successes worldwide.
“Depending on what tariffs and trade barriers are put in place, we could have great success outside of China,” Musk said.
“Frankly, if trade barriers weren't established, most businesses around the world would go out of business.”
The EV industry has been suffering from weak demand for more than a year, and Tesla's price cuts are likely to exacerbate pressure on startups and automakers such as Ford.
At least nine brokerages lowered their stock prices and seven raised their ratings.
The company has an average rating of “hold” and a median price target of $225, nearly 9% above the stock's previous closing price.
Tesla short sellers have made $3.45 billion so far this year, making it the most profitable short sale in the U.S., according to data analysis firm Ortex.
The company's stock trades at nearly 60 times trailing 12-month earnings, according to LSEG data.
As a result, it has a higher valuation than the other “Magnificent Seven” stocks (a group that includes Apple, Microsoft, and NVIDIA).
with post wire
