Tesla fell initially and then rose after hours, with Q4 revenue below expectations, and vehicle deliveries are expected to regain growth this year

Tesla's stock fell over 6% after hours but then turned positive, currently up over 5%.

Tesla's adjusted EPS for the fourth quarter was $0.73, while analysts expected $0.75. Fourth-quarter revenue was $25.71 billion, with analysts expecting $27.21 billion.

Operating profit for the fourth quarter was $1.58 billion, while analysts expected $2.68 billion. The gross profit margin for the fourth quarter was 16.3%, with analysts expecting 18.9%. The company's cost-cutting efforts were not as significant as previously thought, which is related to production line issues. Free cash flow (FCF) for the fourth quarter was $2.03 billion, while analysts expected $1.75 billion.

China's vehicle deliveries in the fourth quarter set a record. Plans to launch full self-driving (FSD) in China and Europe by 2025. Energy storage deployment is expected to grow at least 50% compared to last year by 2025. The electric pickup Cybertruck is expected to meet the IRS consumer tax rebate standards. Overall vehicle business is expected to resume growth by 2025. New models are still on track for production in the first half of 2025, with more affordable models also on track for production in the first half of the year. The Tesla Cybercab is planned to be produced in 2026.

The following is an excerpt from the financial report:

The fourth quarter set records in vehicle deliveries and energy storage deployment. We expect the Model Y to become the best-selling vehicle globally again in 2024, regardless of vehicle type. We have launched an improved new Model Y and rolled it out in all markets. In 2024, we made significant investments in infrastructure, which will drive the next wave of growth for the company, including vehicle manufacturing capacity for new models, AI training computing power, and energy storage manufacturing capacity.

Customers remain highly concerned about affordability, and we continue to review every aspect of the cost of goods sold (COGS) for each vehicle to help alleviate this issue. In the fourth quarter, the COGS per vehicle reached the lowest level ever, below $35,000, primarily due to improvements in raw material costs, which helped partially offset our investments in attractive financing and leasing options.

The energy business also set new records in the fourth quarter, achieving the highest gross profit ever. The construction of the Shanghai Megafactory was completed in December and will begin ramping up production capacity this quarter. As we continue to ramp up production of Powerwall 3 and roll it out in more markets, Powerwall deployments set a record again this quarter2025 will be an important year in Tesla's history, as FSD (Full Self-Driving) will continue to improve rapidly, aiming to ultimately exceed human safety levels. This will eventually unlock an unsupervised FSD option and Robotaxi business for our customers, which we expect to begin rolling out in certain areas of the United States later this year. We are also committed to launching FSD (supervised mode) in Europe and China in 2025