Tesla (TSLA) Q4 2024 earnings results and conference call transcript
Published , by Asif Khan
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'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.
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At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions: