Tesla, which frequently opened its price reduction window last year, ultimately achieved its annual sales target of 1.8 million vehicles and a 50% increase. But the sales performance is good, but the book performance is not optimistic. This year, stable growth may become the main tone for Tesla to balance sales and performance.
On January 25th, Tesla released its financial report, which showed a year-on-year increase of 19% in revenue and a year-on-year increase of 19% in net profit last year. However, compared to 2022, its revenue and profit growth has significantly slowed down, and its gross profit margin has not returned to 20%. Tesla attributed the lackluster financial report to a decrease in average vehicle prices and an increase in operating expenses driven in part by artificial intelligence and other research and development projects. In the eyes of the outside world, issues such as slowing demand for Tesla models still exist.
For Tesla, with a simple "S3XY" product lineup and continuously optimized production models and processes, existing products can reduce costs and reserve space for Tesla to lower prices. However, in the fiercely competitive new energy vehicle market, Tesla models also urgently need to be updated to provide more freshness for expanding market demand. In response to this, during the financial report conference call, Tesla CEO Elon Musk presented a new car plan and stated that "production of the next generation of electric vehicles will begin in 2025.".
Slowing performance growth rate
According to the financial report, Tesla's revenue last year was 96.773 billion US dollars (approximately 692.2 billion yuan), a year-on-year increase of 18.79%; The operating profit margin was 9.2%, a year-on-year decrease of 7.6 percentage points; The net profit attributable to common shareholders was $15 billion (approximately RMB 107.5 billion), a year-on-year increase of 19%; The net profit attributable to common shareholders under non US GAAP accounting standards was $10.9 billion (approximately RMB 78.1 billion), a year-on-year decrease of 23%.
Among them, Tesla's revenue increased by 19% year-on-year last year, but compared to the high growth rate of over 50% in the previous two years, the revenue growth rate has significantly slowed down. In the eyes of the outside world, the slowdown in Tesla's revenue growth is not unrelated to frequent price adjustments of its models. Through official promotions and other means, Tesla's sales reached 1.81 million vehicles last year, a year-on-year increase of 38%, which can meet the expected target of 1.8 million vehicles. However, according to statistics, Tesla's global sales growth rates from 2021 to 2023 were 87%, 40%, and 38% year-on-year, respectively, and the annual sales growth rate continued to slow down.
In addition, in last year's financial report, Tesla's gross profit margin was 18.2%, a decrease of 7.35 percentage points from 2022. In fact, since last year, Tesla's gross profit margin has been on the red light, reaching 19.3%, 18.2%, 17.9%, and 17.6% in the first to fourth quarters respectively, but has never returned to above 20%.
Although the automotive business sector has not been satisfactory, Tesla's energy storage sector has steadily improved in performance. The financial report shows that Tesla's total installed capacity of energy storage was 14.7 gigawatt hours last year, a year-on-year increase of 125%; The revenue was 6.04 billion US dollars (approximately 43 billion RMB), a year-on-year increase of 54%. Tesla expects its energy storage business to continue to grow in the next year. In addition, Tesla officials stated, "The gross profit of services and other businesses increased from - $500 million in 2019 to $500 million last year. At the same time, Tesla's bicycle costs continued to decline in the fourth quarter."
Urgent need for the next generation of new cars to help the market
In the context of slowing growth, Tesla's expectations for sales are also becoming more conservative.
After the financial report was released, Tesla did not provide a sales target for this year as usual. Faced with the question of whether Tesla expects to achieve a 50% compound annual growth rate in sales in 2024 or 2025, Tesla CFO Vaibaf Tania candidly stated that "Tesla will not grow at the same rate in certain periods." Analysts predict that Tesla's car sales this year will be about 2.2 million units, a year-on-year increase of about 20%.
In its financial report, Tesla also mentioned that "this year's sales growth rate may be significantly lower than last year's growth rate, as the Tesla team is committed to launching the next generation of cars at the Texas super factory." In response, Musk revealed that "the next generation of cars is expected to be put into production in the second half of 2025." This news immediately drew attention.
In fact, as competition in the new energy vehicle market intensifies, Chinese car companies are achieving "overtaking on the bend" with the help of new energy vehicles. "If there were no trade barriers, Chinese car companies could take over most of the other car companies in the world," Musk said bluntly. "Chinese car companies are the most competitive in the world and will achieve extraordinary success outside of China.". Industry insiders believe that the rapid rise of Chinese car companies in the new energy vehicle market has also brought pressure to Tesla. At this time, Tesla urgently needs to launch a model with more cost and price advantages compared to the Model "3Y" to stimulate sales.
Musk has revealed that the size of the next generation model will be smaller than the currently available Model 3 and Model Y, and the cost will be half of the existing platform. Yan Jinghui, a member of the Expert Committee of the China Association of Automobile Manufacturers, stated that Tesla's four models on sale have been available for many years and require further expansion of vehicle models. At the same time, lower cost models can also attract more customer groups through more affordable prices, thereby helping Tesla seize more market share.
"Currently, Tesla is in between two major 'growth waves'." Musk admitted that the first wave began with the global expansion of the Model 3/Y platform, and the next growth wave will be initiated by the global expansion of the next-generation automotive platform. ". In his view, the production of a new car model will be a challenging project, but through optimization, the model may change the game rules of large-scale automobile production. For the arrival of the new car, Musk even stated that he would "sleep on the production line".
While accelerating the mass production of next-generation models, Tesla's research and development investment is also constantly increasing. The financial report shows that Tesla's R&D expenses last year were 3.969 billion US dollars (approximately 28.3 billion yuan). Tesla officials have stated that Tesla is continuously investing its main energy and resources into technology research and development.