Tesla Q1 2024 Earnings Report
Key Takeaways
Tesla's Q1 2024 saw a revenue decline of 9% YoY to $21.3 billion, with operating income decreasing to $1.2 billion, resulting in a 5.5% operating margin. The company faced challenges including production disruptions and pricing pressures, but is investing in future growth areas such as AI infrastructure and new product development.
Revenue declined 9% YoY to $21.3 billion due to reduced vehicle ASP and lower deliveries.
Operating income decreased to $1.2 billion, resulting in a 5.5% operating margin, impacted by pricing pressures and increased operating expenses.
Free cash flow was negative $2.5 billion due to increased inventory and AI infrastructure capex.
Tesla is investing in future growth, including AI infrastructure, production capacity, and new products.
Tesla
Tesla
Tesla Revenue by Segment
Forward Guidance
Tesla anticipates vehicle volume growth rate in 2024 to be notably lower than 2023 as they focus on the launch of the next-generation vehicle platform. They expect energy storage deployments and revenue growth to outpace the automotive business. Tesla has updated its future vehicle line-up to accelerate the launch of new models, utilizing aspects of the next generation platform and current platforms, to be produced on the same manufacturing lines as current vehicles. The robotaxi product will continue to pursue a revolutionary “unboxed” manufacturing strategy.
Positive Outlook
- Sufficient liquidity to fund product roadmap, long-term capacity expansion plans, and other expenses.
- Expect hardware-related profits to be accompanied by an acceleration of AI, software, and fleet-based profits over time.
- Accelerating the launch of new vehicle models ahead of the previously communicated start of production in the second half of 2025.
- New vehicles will utilize aspects of the next generation platform and current platforms, enabling production on the same manufacturing lines.
- Aiming to fully utilize current expected maximum capacity of close to three million vehicles, enabling more than 50% growth over 2023 production before investing in new manufacturing lines.
Challenges Ahead
- Vehicle volume growth rate in 2024 may be notably lower than the growth rate achieved in 2023.
- Update may result in achieving less cost reduction than previously expected.
- Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs.
- The biggest driver of gross profit reduction YoY was lower used vehicle profit.
- Free cash flow was negative $2.5B
Revenue & Expenses
Visualization of income flow from segment revenue to net income