British News Agency

The company, led by Elon Musk, stated that it earned a profit of $2.3 billion in the last three months of 2024. This was a decline compared to $7.9 billion a year earlier, but Tesla's 2023 profit included a one-time tax advantage of $5.9 billion. Excluding this special gain, Tesla's operating profit fell by 23% in the last three months of the year.

Sales increased by 2% in the fourth quarter, rising from $25.2 billion in the same period of 2023 to $25.7 billion.

The company's revenue and profit were supported by $692 million in regulatory credit sales to other automakers that needed them to meet emission standards. A year earlier, the company earned $433 million from such sales. The Trump administration and Republicans in Congress have stated that they plan to repeal regulations allowing Tesla to sell these credits.

Tesla reported that for the entire year, its profit declined to $7.1 billion, down from $15 billion the previous year. Sales increased from $96.8 billion in 2023 to $97.7 billion.

Tesla also sells batteries used by power companies, businesses, and homes to store energy from solar panels and other sources. The growing sales of these products helped offset weak car sales.

The company remains highly dependent on two models, the Model 3 sedan and Model Y SUV, while its competitors in Asia, Europe, and the U.S. offer a broader and growing range of electric vehicles.

China-based BYD sells more than a dozen electric and plug-in hybrid models, ranging from subcompacts to minivans, and has emerged as Tesla's biggest competitor outside the United States. HSBC analysts stated in a report that Chinese automakers are expected to launch more than 60 models in just the second quarter of this year.

In its earnings report, Tesla announced that a new and improved version of the Model Y would be available in March with a starting price of around $60,000. The current Model Y has a starting price of about $45,000. The company also said that "more affordable" models would enter production in the first half of the year, though it did not provide details.

Tesla stated that its autonomous vehicle, called Cybercab, capable of operating as a driverless taxi, will enter production in 2026.

Increased competition and Tesla's relative lack of new models caused the company's market share to decline last year in China, Europe, and the U.S. Earlier this month, Tesla reported that it sold 1.8 million vehicles worldwide in 2024, slightly fewer than in 2023. This marks a significant shift for a company that increased vehicle sales by 38% in 2023 and 40% in 2022.

According to Cox Automotive, Tesla's share of the U.S. electric vehicle market fell from 51% in the last quarter of last year to 44% this year. Tesla also lost ground in the luxury segment. Cox reports that in 2024, BMW sold as many luxury i5 and i7 sedans as Tesla sold Model S vehicles, while Rivian sold about 7,000 more R1S SUVs than Tesla's Model X.

Sales of Tesla's newest vehicle, the Cybertruck, which starts at about $80,000, also appear to be declining. Cox estimates that Tesla sold 13,000 Cybertrucks in the fourth quarter, down from fewer than 16,700 in the third quarter.

To boost sales, Tesla cut prices and offered low-interest financing, but these measures came at the cost of profit. Nonetheless, Tesla remains one of the few automakers that profit from electric vehicles. Ford, General Motors, and others are still not selling enough EVs to recoup the investments they made in retooling assembly lines and producing batteries.

Despite its weak financial performance, Tesla's stock has risen since November. Investors are instead focusing on Musk's promises to produce autonomous "cyber taxis," which he claims could generate trillions of dollars in revenue. On Wednesday, the company announced that its taxi business would launch "later this year" in some parts of the United States.

Barclays analysts stated in a report this month, "The stock has detached from fundamentals." Instead, they noted that investors are betting on "Elon's star power" and Tesla's role as a disruptor—no matter how distant the opportunity may be.

Some investors are also hoping that Musk's close relationship with former President Donald Trump could benefit Tesla, such as by removing regulatory barriers for autonomous vehicles.

However, Trump and Republicans in Congress have vowed to eliminate tax credits and other incentives for electric vehicles, including Teslas. Musk claimed that removing incentives would hurt Tesla's competitors more than Tesla itself.

The company, headquartered in Austin, Texas, announced that it would introduce a new vehicle this year that will sell for a significantly lower price than the Model 3, which currently starts at $42,000 before government incentives.