Tesla Stock Heads Toward 8-Month Low After 23% Annual Profit Decline


Tesla stock tanked Thursday after the company’s earnings report fell flat, as Elon Musk’s electric vehicle goliath grapples with shrinking margins as it expands output.

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Key Facts

Shares of Tesla were down roughly 9% to $190 about 45 minutes before Thursday’s official market open, pacing toward Tesla’s lowest opening price since May 26, 2023; the stock is now down about 25% in 2024.

In its fourth-quarter earnings report late Tuesday, Tesla reported $25.2 billion of sales and $0.71 earnings per share, missing average analyst estimates of $25.6 billion and $0.73, according to FactSet.

Tesla’s profits fell 40% last quarter compared to the final period of 2022, while revenue grew a more modest 3% year-over-year.

The slide in profits came as Tesla initiated a series of price cuts on its cars, sending profit margins down significantly, as its 17.6% gross margin during Q4 was its lowest mark since 2019, down more than 600 basis points from last year.

Tesla reported earnings per share of $3.12 for 2023, a 23% decline from 2022’s record $4.07; the company’s $16.6 billion in adjusted earnings before interest, taxes, depreciation and amortization was 13% lower than 2022’s $19.2 billion adjusted EBITDA.

Perhaps most worrisome was Tesla’s vague warning of “notably lower” output in 2024, as analysts slammed Musk and company’s lack of clear guidance.