Tesla's fourth-quarter earnings are below analyst estimates as the company warns of lower sales growth this year

DETROIT – Tesla's net income doubled in the fourth quarter of last year thanks to a large one-time tax benefit, but it warned of “significantly lower” sales growth this year.

The Austin, Texas-based maker of electric cars, solar panels and batteries said on Wednesday that its net income was $7.93 billion in the October-December period, compared with $3.69 billion a year earlier.

But excluding one-time items such as non-cash tax benefits of $5.9 billion in deferred tax assets, the company generated $2.49 billion, or 71 cents per share. That's down 39% from a year ago and below analyst estimates of 73 cents per share according to FactSet.

CFO Vaibhav Taneja said the change in asset valuation would lead to increased taxes on the company.

Tesla reported quarterly revenue of $25.17 billion, up 3% from a year earlier but also below analyst estimates of $25.64 billion.

Profits stalled because Tesla cut prices worldwide during the year in an attempt to boost its sales and market share.

Earlier this month, Tesla reported that fourth-quarter sales rose nearly 20%, helped by sharp price cuts in the United States and around the world during the year. Some discounts reached $20,000 on higher-priced models.

Tesla Inc shares fell. By 6% in trading after the markets closed on Wednesday. So far this year, Tesla shares are down about 16%.

Tesla's sales growth rate was slower than previous quarters. Over the full year, sales rose 37.7%, below the 50% growth rate that CEO Elon Musk expects in most years. The company reported deliveries of 484,507 during the quarter and about 1.8 million for the full year.

In its letter to shareholders issued on Wednesday, Tesla warned that sales growth this year could be “significantly lower” than the growth rate in 2023, as it works to launch an affordable next-generation car at a factory near Austin.

The letter stated that the company is between two major waves of growth, one from the global expansion of the Model 3 and Y, and the second coming from the new car.

In a conference call with analysts, Musk said Tesla expects to begin production of the new car near the end of 2025. Revolutionary manufacturing techniques that require innovative equipment will require engineers to “live on the assembly line,” Musk said.

After Austin, the company will build the new vehicles at a new factory to be built in Mexico, he said.

Seth Goldstein, an analyst at Morningstar Research, said Tesla's results were mixed, with growth expected to slow in the near term, but with the customer base likely to grow when the next-generation car is rolled out.

“An affordable vehicle provides Tesla with the next wave of strong growth,” Goldstein said. “But it looks like it won't start production until the end of next year at the earliest.”

Until the new car is in production, Tesla will likely remain in a slower growth mode, he said, estimating that the new car will cost less than $30,000 when it hits Tesla stores.

Musk was asked whether shareholders should be concerned about his comments on

Earlier this month, Musk appeared to challenge Tesla's board of directors to come up with a new compensation plan for him that would give him more stock.

Unless he gets 25%, he wrote that he would prefer to build products outside of Tesla, apparently with another company.

On the call, Musk explained that with a 25% stake, he could not control the company, but he would still have a strong influence. But with his current stake, he could be voted on based on the recommendations of a shareholder advisory firm. Musk said activists who influence those companies “have strange ideas about what to do.”

He said he is not looking for “extra economics” but wants to be an effective steward of the technology.

Musk now owns about 13% of Tesla shares after selling a large portion of his stake to buy X in 2022.

Tesla said deliveries of the stainless steel-clad Cybertruck will increase this year. Also this year, revenue growth from energy storage is expected to outpace that of its automotive business, the company said.

Tesla's gross profit margin fell to 17.6% during the quarter, down 3.8 percentage points from a year ago, as price cuts impacted profits.

For the full year, Tesla reported net income of roughly $15 billion including one-time tax benefits. Excluding that, the company generated $10.88 billion, down 23% from 2022. Gross margin was 25.6% in 2022, but fell to 18.2% last year.

Tesla said that during the fourth quarter, it launched the latest version of its “full self-driving” program to employees and then chose the customers who would test it. The new version uses artificial intelligence to help control the steering and pedals rather than “hard coding” all driving behaviour. But the system still can't drive itself, and Tesla says owners must be ready to intervene at all times.

Musk said Tesla has had some initial conversations with other automakers about licensing “full self-driving,” but no one has come forward. I guess they don't believe it's real yet. “I think this will probably become clear this year,” Musk said.

Tesla's “full self-driving” hardware went on sale in late 2015, and Musk has used that name ever since.

In 2019, Musk promised a fleet of robotaxis by 2020, and said in early 2022 that the cars would be self-driving that year. In April, Musk said the system should be ready in 2023.

Last January, Tesla revealed that the Department of Justice had requested documents related to Autopilot and “full self-driving” features.