Tesla shares drop after Q4 margins and earnings miss
Make us a preferred source
Make us a preferred source on Google
The news: Tesla’s gross margin shrunk further in the fourth quarter amid widespread price cuts, and the electric vehicle maker warned of a notable slowdown in sales growth this year.
The numbers: The company reported a gross margin of 17.6% for the three months ended December, down from 23.8% a year ago, and below analysts' average estimate of 18.3%. Earnings per share also fell to 71 US cents, missing a market estimate of 74 cents. Shares in the company were down 2.5% in after hours trading in New York.
The context: Fourth-quarter revenue rose 3% to USD25.17 billion, marking its slowest pace of growth in more than three years. Tesla managed to hit its 2023 deliveries target of 1.8 million cars, but CEO Elon Musk warned of a hit to demand from high interest rates even as it lost its spot as the top EV maker by sales to China's BYD. The company has slashed prices throughout last year, cutting the price of the Model Y, its most popular vehicle, by as much as 26.5% in the US.
"In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as our teams work on the launch of the next-generation vehicle at Gigafactory Texas," Tesla said in a statement.
