Tesla misses fourth-quarter estimates on weak auto revenue, warns of lower volume growth in 2024


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Elon Musk, chief executive officer of Tesla Inc and X (formerly Twitter) Ceo speaks at the Atreju political convention organized by Fratelli d’Italia (Brothers of Italy), on December 15, 2023 in Rome, Italy. 
Antonio Masiello | Getty Images

Tesla is set to report fourth-quarter earnings for 2023 after the bell Wednesday.

Here’s what analysts are expecting, according to estimates compiled by LSEG, formerly known as Refinitiv:

  • Earnings: 74 cents per share
  • Revenue: $25.6 billion

While other U.S. automakers struggled to make and sell a high volume of fully electric vehicles last year, Tesla reported 484,507 deliveries in the fourth quarter and more than 1.8 million for 2023. Hefty price cuts helped Tesla achieve that number, which was a record for the company.

Tesla’s revenue likely increased by around 5% year over year for the quarter, per LSEG.

On the global stage, Chinese auto giant BYD topped Tesla during the last quarter of 2023. But Tesla maintained its lead in sales of battery electric vehicles for the full year.

Labor costs are rising domestically. In order to make its wages competitive versus automakers like General Motors, Ford and Stellantis, where employees are represented by the United Auto Workers, Tesla recently rolled out pay increases for many of its hourly factory employees in the U.S.

Tesla is also facing union pressure in Sweden and across Scandinavia, and a wide-ranging array of litigation and ongoing regulatory probes in the U.S. and Europe. CEO Elon Musk is under more pressure than ever to deliver on his longstanding promise of a software update that can turn existing Teslas into self-driving robotaxis without hardware changes.

Tesla shareholders submitted questions for executives to answer via the platform Say Technologies ahead of the earnings call.

They’re asking when Tesla plans to debut its “next-generation” vehicle, a more affordable EV referred to by fans as the Model 2. Investors also want to know the number of orders Tesla has received for its recently released Cybertruck and when the company plans to increase production of its 4680 battery cells and electric Semi truck at its Nevada Gigafactory.

Shareholders voiced concerns about Musk’s recent demand to control more of the company. In a Jan. 15 post on X, formerly Twitter, Musk wrote: “I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla.”

On the Say platform, investors asked, “Should retail shareholders be concerned that Elon has stated he is uncomfortable expanding AI and robotics at Tesla if he doesn’t have 25% of voting?”

Even investor Ross Gerber, who’s been a Musk fan and Tesla bull for years, bristled at the proposition. Gerber said on CNBC’s “Last Call” with Brian Sullivan, that Musk was “blackmailing” Tesla shareholders, and that “the idea that he doesn’t control Tesla is absurd.” He added that “everyone on the board is a friend or family member of his.”

Musk is already building artificial intelligence products outside of Tesla, including at X.AI, a startup he incorporated in Nevada in March 2023, according to public filings. On a Tesla earnings call in July 2023, Musk told analysts, “there were just some of the world’s best AI engineers and scientists that were willing to join a startup but they were not willing to join a large, sort of relatively established company like Tesla.”

Tesla has announced plans to build its own data centers, Dojo supercomputers and a humanoid robot, branded Optimus.

Tesla shares have dropped about 16% so far this year as of Tuesday’s close after more than doubling in 2023.

WATCH: Elon Musk is very much in charge of Tesla

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