Tesla forecasts slowing growth for 2024

  • Tesla has shared its quarterly earnings report for Q4 2023, as well as guidance to investors for the upcoming financial year.
  • Despite hitting records in terms of EV deliveries in 2023, Tesla is forecasting a slowing of sales for this year.
  • This dip in growth is down to the fact that Tesla is developing a new vehicle platform that includes a $25 000 model.

Several technology companies are releasing their quarterly earning reports this week, one of which is Tesla. The company shared its key performance metrics for Q4 2023, while also advising its investors on what the outlook for 2024 will be.

Regarding the latter, a dip in growth is predicted, with Tesla having a few new irons in the fire this year.

To that end, as TechCrunch points out, despite seeing a record setting year in terms of electric vehicle deliveries to customers in 2023, the EV car maker is anticipating sales to fall over the next 12 months.

One of the contributing factors to this are the price cuts that Tesla has implemented in order to drive sales of its Model Y and Model 3 EVs in particular, but those drives in sales comes at the cost of narrowing margins due to discounted pricing.

“In 2023, we delivered over 1.2 million Model Ys, making it the best-selling vehicle, of any kind, globally. For a long time, many doubted the viability of EVs. Today, the best-selling vehicle on the planet is an EV. Free cash flow remained strong in 2023 at $4.4B, even as we focused on future growth projects with our highest capital expenditures and R&D expenses in company history,” a summary of the report highlighted.

“We are focused on bringing the next generation platform to market as quickly as we can, with the plan to start production at Gigafactory Texas. This platform will revolutionize how vehicles are manufactured,” it added.

The company describes its 2024 as being, “between two major growth waves.”

Whether that turns out to indeed be the case remains to be seen, but with the long-awaited Cybertruck ballooning in price because of design and performance changes, it is one model of vehicle that the company may not see good return on for some time as the costs to ramp up its production will impact profitability this year.

Another contributing factor to a slow down in 2024 is the development of a smaller EV that will cost an estimated $25 000 (~R471 639) when it is ready to be purchased by customers.

The yet-to-be-named EV is scheduled to go into production in 2025, with the aforementioned Gigafactory Texas serving as the location for its development and rollout. Of concern though are some comments made by CEO Elon Musk, who noted that, “we really need the engineers to be living on the line,” during this week’s investors call.

There could be some crunch in order to get this mystery $25k Telsa on the roads in 2025 then, especially given the continued delays that the Cybertruck took in coming to fruition.

It therefore looks like the company is tempering expectations in terms of electric vehicle business in 2024. It will be interesting to see whether other car makers can take advantage of this over the coming year.

[Image – Photo by Milan Csizmadia on Unsplash]


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