Tesla has witnessed a dramatic 70 percent drop in profits, with Q4 2024 earnings at $2.3 billion, falling short of expectations. Despite this, the stock has surged 108 percent, fueled by hopes of benefiting from a new political landscape. However, challenges loom with reduced EV incentives and aggressive competition in global markets. CEO Elon Musk’s promises of growth and advancements in autonomous driving face skepticism, as analysts predict a tough road ahead for the company.
Declining Profits and Investor Skepticism
The electric vehicle manufacturer Tesla has experienced a staggering decline in profits, dropping by more than 70 percent. Once again, the company is surrounded by ambitious promises from CEO Elon Musk, but many experts remain doubtful.
The latest financial figures paint a grim picture: in the fourth quarter of 2024, Tesla’s profits plummeted by 71 percent, landing at 2.3 billion dollars. Furthermore, the company fell short of market expectations, reporting revenues of only 25.7 billion dollars.
Stock Market Reaction and Future Predictions
Despite the disappointing performance, Tesla’s stock has surged by 108 percent over the past year. This rise can be attributed in part to a positive reaction to political developments, particularly after the recent US presidential election.
Investors are optimistic that Tesla will capitalize on the new administration, as Musk has maintained a close relationship with the White House. However, these hopes have yet to materialize. Trump’s administration has already reviewed electric vehicle incentives and rolled back funding for charging infrastructure, which could significantly hinder Tesla’s sales prospects.
Despite the negative signals, Musk has promised a return to sales growth by 2025, driven by the launch of more affordable models. However, the projected growth rate has been scaled back from earlier estimates, raising further concerns among analysts.
In addition to challenges in the US market, Tesla faces fierce competition globally, particularly in China and Europe, where price wars and negative publicity could impact sales. Analysts predict that 2025 may prove challenging for Tesla amid these headwinds.
Musk has also hinted at ambitious advancements in autonomous driving, with plans for a robotaxi service set to launch in Austin by mid-year, aiming for global expansion by 2026. However, skepticism remains regarding the feasibility of these promises, especially given the competitive landscape in autonomous technology.
As Tesla navigates these challenges, experts warn that the company must not only meet sales expectations but also deliver on its ambitious plans for autonomous driving to ensure continued investor confidence and stock performance.