Electric Vehicle Price Cuts Lead to Margin Decline
Intraday Drop of Up to 5%
Tesla announced disappointing fourth-quarter results last year that fell short of market expectations, causing its shares to plunge more than 3% in after-hours trading.
On the 24th (local time), Tesla reported after the market closed that its fourth-quarter revenue last year was $25.2 billion, with earnings per share (EPS) of $0.71.
Both figures were below market expectations. According to financial data provider FactSet, Tesla's fourth-quarter earnings estimates were $25.6 billion in revenue and an EPS of $0.73.
Annual revenue increased 19% year-over-year to $96.8 billion, while annual EPS declined 23% over the same period to $3.12.
Tesla's weak fourth-quarter performance is attributed to a slowdown in the electric vehicle market growth and Tesla's price cuts on electric vehicles, which led to a decline in margins. Tesla's gross profit margin for the fourth quarter last year was 17.6%, the lowest level since 2019. This represents a sharp drop of 6 percentage points compared to the previous year.
Tesla's stock price fell as much as 5% immediately after the earnings announcement in after-hours trading and is currently down more than 3%.
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