Tesla Inc. CEO Elon Musk and other executives have tempered the company’s 2025 growth expectations, pointing to a large retooling project, a shortage of batteries and the complexities of building its Optimus humanoid robots.
Three months ago, Musk forecast that Tesla would grow its volumes this year by at least 20% as the Austin-based company rolled out new cars with lower sticker prices. But speaking to analysts and investors Jan. 29 after Tesla reported its fourth-quarter results, CFO Vaibhav Taneja said the retooling needed to start producing the latest version of its Model Y next month “will result in several weeks of lost production.”
On top of that, Musk said Tesla’s main obstacle to ramping automotive volumes is the number of battery packs it can make.
“We’ve got to figure out how to increase total gigawatt hours of battery production this year one way or another,” Musk said on a conference call. “That’s the constraint on our output.”
Tesla booked a fourth-quarter adjusted net profit of nearly $2.6 billion on total revenues of $25.7 billion. In the last three months of 2023, those numbers were $2.5 billion and $25.2 billion, respectively. Net income was boosted by a $600 million accounting benefit from the marking to market the company’s Bitcoin holdings.
Tesla delivered more than 495,000 vehicles during the quarter, an increase of 2% from late 2023. But automotive revenues fell 8% year over year to $19.8 billion as executives sought to slash the company’s inventory with the help of incentives. The average price per car fell 10% to about $39,950, which contributed to Tesla’s operating for the margin falling to 6.2% from 8.2% a year prior—despite the average cost of goods sold falling below $35,000 per car. For all of 2024, operating margins were 7.2% versus 9.2% in 2023 and 16.8% the year before that.
Analyst Gene Munster at Deepwater Asset Management noted on X that Tesla’s quarterly results fell short of expectations on several fronts and added that automotive growth forecasts for this year are “a pretty easy bar” to clear. But he also noted that it may not matter.
“Most Tesla investors really don’t care about 2025,” Munster said. “It is all about ’26, ’27 and ’28.”
Autonomous focus
Beyond briefly discussing Tesla’s batteries shortfall, Musk didn’t spend much time on cars during his team’s conference call. Most of his remarks centered on autonomy and included the announcement of a planned June launch of an unsupervised robotaxi service in Austin. He spent much of his time on Tesla’s Optimus humanoid robots—which he said have “the potential to be north of $10 trillion in revenue”—and the development work needed to build them.
Musk lauded the technical capabilities of Optimus, saying it will be able to both play the piano and thread a needle, but also offered a note of caution about the difficulties of building them en masse because Tesla engineers have needed to design a raft of new parts.
“The normal internal plan calls for roughly 10,000 Optimus robots to be built this year. Will we succeed in building 10,000 exactly by the end of December this year? Probably not,” he said. “But will we succeed in making several thousand? Yes, I think we will. Will those several thousand Optimus robots be doing useful things by the end of year? Yes, I’m confident they will do useful things.”
Investors initially didn’t seem to worry much about Tesla’s declining financials or Musk’s occasional words of caution. In after-hours trading Jan. 29, shares of Tesla (Ticker: TSLA) rose more than 4%. But in trading the following morning, they were down about 1% to roughly $385 from where they had ended the regular session the day before. They are, however, still up more than 60% over the past six months, a surge that has grown Tesla’s market capitalization to more than $1.2 trillion.
