Tesla, listed as TSLA on NASDAQ, warns investors of slower sales growth in 2024. Elon Musk cites tough competition and lower demand as key factors. In a recent presentation, Musk discusses Tesla’s position, squeezed between Models 3 and Y success and a new, affordable, next-gen vehicle set for production in H2 2025, featuring “revolutionary manufacturing technology.”
This news causes Tesla’s stock to stumble in premarket U.S. trading, echoing Musk’s concerns about Chinese EV makers surpassing foreign rivals. His remarks also spark worries about potential export restrictions in the sector.
Despite Q4 earnings of $0.71 per share and revenue of $25.17 billion, missing Wall Street estimates, Tesla achieves its 2023 goal of 1.8 million EV deliveries. Yet, it refrains from predicting 2024 deliveries, with analysts projecting a modest 20% increase, well below the initial 50% target.
Tesla’s profit margins feel the heat due to rising competition in China, U.S. price cuts for cost-conscious consumers, and high research and production costs, especially for the Cybertruck. While gross margins dip to 17.6%, automotive gross margins exceed expectations at 17.2%.
Musk acknowledges uncertainty in forecasting future margins, linking them to interest rates. Morgan Stanley analysts predict a significant drop in Tesla’s profitability in 2024. To tackle these challenges, Tesla explores the potential for better margins if interest rates decrease rapidly.
Conclusion:
Tesla grapples with a changing landscape, stressing the need for strategic adaptation amid industry shifts and fierce competition. Investors are advised to stay informed and consider various factors in decision-making.
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FAQs:
Why is Tesla predicting slower sales growth in 2024?
Tesla foresees challenges from fierce competition and declining demand, impacting its sales growth outlook for 2024.
What led to Tesla’s stock stumbling in premarket trading?
Elon Musk’s warnings about Chinese EV makers outperforming foreign rivals raised concerns, causing Tesla’s stock to falter in premarket U.S. trading.
How did Tesla perform in Q4 2023 and what’s the outlook for 2024?
Despite missing Q4 estimates, Tesla achieved its 2023 goal of 1.8 million EV deliveries. However, it refrains from predicting 2024 deliveries, with analysts projecting a modest 20% increase.
Why are Tesla’s profit margins under pressure, and how is it addressing challenges?
Rising competition in China, U.S. price cuts, and high research costs are squeezing Tesla’s profit margins. Elon Musk acknowledges uncertainty, exploring better margins if interest rates decrease rapidly. For more information, contact 4xPip at [email protected].
