Tesla has warned that its growth this year will be “significantly lower”. economy

Tesla sharply halted its growth in the fourth quarter of 2023 and warned that the sales slowdown will continue this year. The company led by Elon Musk published its closing accounts for the last financial year this Wednesday and included a warning that investors did not like at all: “In 2024, our vehicle volume growth rate will be significantly lower than the growth rate achieved in 2023.” “Maybe, as our teams are working on the launch of the next generation vehicle at the Texas Gigafactory.” The company has not specified growth objectives. Tesla has already been overtaken by Chinese company BYD as the largest electric car manufacturer.

The US company’s sales in the fourth quarter of the year increased by only 3% to $25,167 million (23,133 million euros at the current exchange rate), with the sector billings automotive increasing by only 1%. For the full year, revenue rose 19% to $96,773 million, partly driven by the battery and solar business.

Using generally accepted accounting standards, profits are projected to rise 19% to $14,997 million in 2023, according to accounts presented by the company this Wednesday. This is due to an extraordinary tax benefit of $5.9 billion that was recorded in the fourth quarter. Using the company’s own criteria (which do not include this non-recurring item), profitability declined and profit fell 23% to ₹10,882 million in the year. The results disappointed the market and Tesla’s price fell on the stock market outside normal trading hours.

The slowdown in 2023 comes after strong growth in both revenues and profits in 2022, in which Tesla became the most profitable automaker in the United States. In 2023, although car deliveries set a record and continued at a good pace, they did so at low prices. Accounts presented this Friday show the adjusted gross operating profit margin was 17.2% in 2023, compared to 23.2% in 2022. This decline in margins was due to price cuts. On the other hand, expenses increased by 22%, causing operating results to fall 35% to $8,891 million.

In a conference call with analysts, Elon Musk has confirmed that Tesla is preparing to launch a new model by the end of 2025. In his results report, he explains: “We are focused on bringing the next generation platform to market as quickly as possible.” We can do this with plans to begin production at the Texas Gigafactory. This platform will revolutionize the way vehicles are manufactured,” he says. On the conference call with analysts, Musk emphasized the idea: “Once up and running, it will be far superior to any other manufacturing technology that exists in the world. “This is the next level,” he said.

Tesla shares have started 2024 with a decline amid simultaneous concerns about lower demand for electric cars and increased competition in the sector. Tesla is set to take over as the market leader in 2023, but its share is declining and its margins are also shrinking due to price cuts. It fell by 5% this Wednesday after the results were announced.

Automakers, suppliers and even car rental companies have warned that interest in electric vehicles is waning. General Motors and Ford are scaling back their expansion plans in the region, while Hertz is selling a portion of its electric fleet to replace those vehicles with gasoline cars.

Tesla announced on January 2 that it delivered 484,507 cars in the fourth quarter of 2023. The figure represents a record for the company and an increase of 19.5% from a year earlier. For the entire 2023, Tesla sales are expected to be 1.81 million units, an increase of 38% units compared to 2022. The company has met its official target of 1.8 million units, although Musk told the analyst conference a year earlier, in a moment of excitement, that the price cuts the company was pursuing would allow it to reach two million cars in 2023. Could have been allowed to reach.

Although Tesla maintained leadership in the pure electric car market throughout the year, Chinese company BYD overtook Elon Musk’s company in the fourth quarter with sales of 526,409 electric cars. The Asian company was already on the verge of overtaking the American company in the third quarter.

Tesla has told its suppliers it wants to begin production of a new mass-market electric vehicle codenamed “Redwood” in mid-2025, Reuters reported on Tuesday, citing sources familiar with the matter who have not heard about the model. Has been described. Foreigner Dense. Musk has long been trying to launch affordable electric models, including a basic car priced at about $25,000, that would allow him to compete with cheaper gasoline cars and the growing number of affordable electric vehicles made by BYD. Musk first promised to make a $25,000 car in 2020, a plan he later discontinued and then revived. Tesla’s cheapest car, the Model 3 sedan, currently has a starting price of $38,990 in the United States.

Musk’s involvement

This January, Elon Musk surprised the company by demanding a bigger stake in the company. Musk has received more stock awards than any other American executive. However, he has been selling a good portion of his stake in the company for other operations, such as the purchase of Twitter, and now alleges that developing some of his projects with less than a 25% stake is not worth it. Tesla, such as those associated with artificial intelligence, robotics and autonomous driving. Despite selling all his shares, Musk remains the company’s first shareholder with 13%.

In the conference call with analysts this Wednesday he tried to justify himself: “I am not looking for additional profits. I just want to be an effective administrator of a very powerful technology,” he said. “That’s my goal, strong influence, but not control. If there’s a way to achieve this, that would be great,” he argued. “I really see a path to creating an artificial intelligence and robotics giant with enormous potential and power,” he said, cautioning that he would not, for example, risk being ousted by votes recommended by a shareholder advisory firm. Wanted to pick it up.

Much of Tesla’s valuation is tied to the development of these technologies and none of the options left by Elon Musk appeal to the market: take those businesses, which would reduce Tesla’s value, or a larger package of shares. will be received, which will dilute the participation of the remaining shareholders.

Musk wrote on his social networks on January 15, “It’s a lot to be influential, but not so much that they can’t overthrow me.” Until that happens, I would prefer to make products outside of Tesla.

Musk also explained in another message that the reason there is no new stock compensation plan at the moment is that he is still awaiting a court decision by a Delaware court on his previous multi-million dollar plan that resulted from a shareholder lawsuit. Was reviewed. The trial took place in 2022, but the sentence has not been pronounced yet. The value of that plan was approximately $55 billion.

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