The car business of Tesla will see challenges over the next few quarters even though the software, battery storage, carbon credit and robotics arm may reduce the obvious consolidated financial paralysis. But no matter how you see it, Tesla, which has already been beaten, using the number of cars sold, by China’s BYD has a challenging future: “Tesla’s fourth-quarter earnings for 2024 painted a grim picture of the company’s financial health. The automaker reported a 70% drop in net income, earning $2.3 billion in profit compared to the $7.1 billion recorded in the same quarter the previous year.”

First, Elon Musk’s politics in Europe will affect the business. There are reports that some people are touching Tesla cars as he gets deeper into European politics. Those politicians will act. In the United States, Musk has scored many own-goals. Without California, we may not have Tesla the way we have it today. Yes, California has pushed for regulations and credits which benefitted Tesla. As Musk battles those Dems politicians and shifts to Texas where driving EV is not that fashionable, watch some numbers.

Then the big one: who wants to waste money on EV when Trump will make fossil fuels an American right? Yes, expect drops in prices of fossil fuel, thereby making petrol cars cheaper to operate and maintain. Those “Dems” environmental policies have benefitted Tesla, and Trump is rolling them back at scale. The more those regulations are removed, the cheaper would making some fossil-anchored cars, and the more not many will like to spend more for EVs.

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Tesla expects a “return to growth” in its auto business but posted an 8% drop in revenue from its electric vehicles for the fourth quarter. Overall revenue came in below expectations, bolstered by other businesses such as energy storage. Operating income fell 23% year over year as Tesla’s margins narrowed. The company is “on track” to deliver “more affordable” cars in 2025, and CEO Elon Musk said it plans a June rollout of unsupervised “Full Self-Driving” robotaxis in Austin, Texas. – LinkedIn News

Comment on Feed

Comment: Sounds like Market is not buying your analysis for now. Tesla price actually jumped yesterday after earnings announcement and retreated slightly this am. Anyone who sold At-The-Money (ATM) Iron Condor yesterday could have made some nice bucks today.

My Response: Actually, I did not say that Tesla’s market cap will drop. I am simply saying that its car selling business will drop but that will be masked because it is growing other areas. But over time, you will see a crack: “The car business of Tesla will see challenges over the next few quarters even though the software, battery storage, carbon credit and robotics arm may reduce the obvious consolidated financial paralysis.” So, this is not for day traders, this is for those who put their brains in trading by looking at the future. If Tesla cannot sell cars, most other things will fade over time.

Tesla Recorded 70% Earnings Decline in Q4 As Trump’s Anti-Green Policies Threaten Growth


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