AI Summary:
Tesla’s 2024 financial results were disappointing, with several key points highlighted:
- Automotive Revenues: Fell by 8% in Q4 2024 compared to Q4 2023, totaling $19.8 billion.
- Energy and Storage Revenues: More than doubled, growing by 113% to $3 billion in Q4 2024.
- Services: Grew by 31% in Q4 2024, contributing $2.8 billion.
- Total Revenue: Increased by 2% in Q4 2024, but income fell by 23%, with an operating margin of 6.2%.
- Net Profits: Dropped by 71% to $2.3 billion in Q4 2024.
- Annual Performance: Automotive revenues decreased by 6% to $77 billion in 2024. Energy generation and storage increased by 67% to $10 billion. Services grew by 27%, bringing in $10.5 billion.
- Gross Profits: Fell by 1%, with net profits dropping by 53% to $7.1 billion for the year.
- Free Cash Flow: Decreased by 18% to $3.6 billion.
- Regulatory Credits: $2.8 billion of profit came from selling regulatory credits, not from core business activities.
- Future Predictions: Tesla expects energy storage revenues to grow by at least 50% year-over-year and aims to grow automotive sales by more than 60% in 2025.
Despite the poor financial results, Tesla’s share price increased by 103% over the same period.
Ah, but you’ve forgotten the real money maker.
- Having full control over the regulatory authority that currently prevents him putting his automated deathtrap taxis on the roads
Turns out it’s much cheaper to buy governments than it is to perfect self driving technology.
People don’t want Swasticars? Huh.
I wouldn’t buy a Tesla even if Elon wasn’t a Nazi and a Zionist.
You can’t base their company value on the stock market … you base it on how much power and influence they have over government.
And judging by the amount of stupidly arranged love affair they are having with the government … they should be very highly valued.
No, you base company value on its current and future earnings.
All that government influence is useless if people stop buying your products. And it turns out lots of people don’t want to buy products associated with Musk.
Value investing is basically dead, isn’t it? Am I crazy? How can you objectively evaluate a company’s value, notice it is undervalued, and then trade accordingly when price action does not even slightly track the company’s value?
There’s value investing and there’s speculation. If Tesla can make a robot that can mop the floor, even this seemingly ridiculous valuation will look like a bargain. Have to remember, Tesla is not a car company. They are an AI and green tech company. Cars are just their largest activity to date.
I am concerned about Elon though. I think he’s a visionary, I think he’s valuable, but I also think he’s spread far too thin and he’s losing it as a result. Tesla, SpaceX, Twitter, xAI, Neuralink, and his political efficiency project. All of these are full-time 100hr/week jobs. Even if you assume he literally never sees his gaggle of children, hell even if you assume he never sleeps, there’s literally not enough hours in the day. And I think he is thus blind to the fact that his antics are costing him support for the bigger mission.
So when will he have time to play Path of Exile and Polyopia and oligarch?
Value investing isn’t dead. There are tons of value investors, and they aren’t the ones buying Tesla.
My point is, if this is how markets react to worsening sales and an actually insane CEO how can you trust a rational bet to pay off?
Value investors don’t invest in Tesla, so you should not expect its share price to reflect fundamentals.
But they do invest in stocks like Coca Cola and American Express, so you should expect the share prices of those companies to better reflect fundamentals.
That’s just another way of saying buyer sentiment is the only thing that matters, in which case we’re back to square one.
If you’re a value investor then you believe that the actual value of a company depends on its current and future earnings and the market price will tend towards the actual value in the long run.
But naturally there are other factors that also influence the market price. In fact, the whole point of value investing is to find stocks that are “underpriced”. For various reasons, they are currently priced at a discount to their actual value. Those are the stocks you should buy, and you should expect their price to increase.
Conversely, for various reasons some stocks are “overpriced”, like Tesla. You should not buy those, because you expect their price to decrease in the long run.
A corollary is that value investors expect seemingly irrational price movements like we see with Tesla. If share prices perfectly reflected fundamentals, then it would be impossible to find a “good deal”.
Right. So anyway, the market does often appear oversensitive to buzz and under-responsive to fundamentals. What’s your take on market reforms? Are there any changes you’d like to see, regulatory or otherwise?
I don’t care if the market is under responsive to fundamentals. That just means some investors are exercising poor judgment by paying too much attention to irrelevant factors. It also gives an opportunity to investors with better judgment.
Value investing is basically dead, isn’t it?
You’re looking at a too short time frame. The famous tulip bubble lasted for a decade, too.
That’s not new to Tesla. Avoid bubble stocks. Avoid penny stocks. Buy “stodgy”
I’m not into Tesla stock. I’m not just here to whine about a single stock not doing what I want, it’s that I think price action in general is too irrational. I’ve got an axe to grind here and it goes beyond which stocks to pick.
Huge ETFs and algorithmic trading makes too many tickers move all the same way. This harms price discovery. And don’t get me started on off-exchange trading; This month, off-exchange volume exceeded that of lit markets.
Credits aside, these dont seem like bad numbers when compared to spend/investment. Tesla management got what they wanted.
Tesla’s share price increased by 103% over the same period.
It’s funny when people cry about crypto being a scam when the entire “economy” is a casino based on genocide tokens.
They’re both scams, but at least companies make things.
So they are making bank on storage and energy, but they are allowing Trump and the EPA to ruin it? Also he makes electric vehicles and Trump and Co are trying to bring back gas guzzlers and straight pipes. Hmmm. I think Elons mouth wasn’t sufficiently moist enough for trump.
Expensive luxury cars for rich people with over 30 thousand subsidy, and they will still lose money. Credits is the new Bitcoin.
Net profits $2.3B. “Poor financial results”.
How does one reconcile these two things?
But yeah, I live in a country that has had about 0% growth since 2008 :-| Perhaps this is bad news for you rich yankees.
Also note that the automotive industry seems to be pretty much flatlining like my dear country: https://www.vettafi.com/indexing/index/autos
Net profits $2.3B. “Poor financial results”. How does one reconcile these two things?
That’s 2.3B USD on a 1.29T USD valuation, or 0.17%.
Valuations are typically reflective of expected future profits. Multiples of ×20 yearly profit are possible for risky (tech or biotech usually) companies. But the ratio is ridiculously off the charts for tesla. If it does not improve, it will have turned out to have been a very wastefull use of capital.
It used to be double that, so I can see why people see it as a bad thing. But I also don’t think 7.1B profits qualifies as “poor financial results”, even if it used to be higher.
I’m glad for them.
they don’t make electric vehicles. they make human sized battery powered over engineered poorly designed toys that were somehow street legal.
i guess time to short it? seems like a bubble
Bill Gates is famously shorting TSLA (1)
So more than a third of their net profits come from selling credits they received from the government? Am I understanding that correctly?
They are emissions credits. Every company receives some amount of “CO2 emission credits” from the government. These allow you to emit a certain amount of carbon dioxide. If you don’t emit all the CO2 that your credits allow, you can sell those credits to other companies that need more than the government gives them.
The idea is to put a total limit on the amount of emissions in the country, while letting the market figure out where it makes most sense economically to invest in emission reduction.
Tesla makes only EV cars and so it doesn’t need all the credits a typical gasoline car company would receive. So they sell them.
“Tesla makes only EV cars and so it doesn’t need all the credits a typical gasoline car company would receive. So they sell them.”
Which means the system isn’t working. Surplus credits should come from improved efficiencies, not excessive allotment.
Which means the system isn’t working. Surplus credits should come from improved efficiencies, not excessive allotment.
Total number of credit goes down over time. That mechanism ensures an adapt, die or emigrate pressure for large polluters, and a financial stimulus for small-polluters.
I think it’s from Europe. Car manufacturers in Europe must sell at least n ev every year. Stellantis, that was asleep at the wheel and only has undesirable EVs that don’t sell, is paying billions to Tesla to make a fictitious alliance, so they will meet the sales target and won’t pay the fine
You are. Without the EV credits, Tesla would have folded years ago.
It’s not EV credits it’s “cap and trade” carbon credits that they’re selling.
Good.
If any other company dropped net profits by 71% they’d be firing their CEOs (well giving them a golden parachute to gtfo) and having some major shake ups.
Good thing musky got that big compensation package shoved through, eh?
