Tesla's performance is in adversity: annual profit decreases for the first time, price reduction policy brings positive and negative effects

According to news on January 25, Tesla, as a leader in the electric vehicle market, seems to have encountered some performance challenges recently. Although Tesla has long been promoting the development of the electric vehicle industry and has always occupied a leading position in the market, the latest financial report data shows that this star company is going through a difficult period.

According to Tesla’s fourth quarter and full-year financial report for 2023, the company’s profits fell for the first time last year. Especially in the fourth quarter, profits fell sharply year-on-year. down 40%. Revenue and earnings per share also failed to meet market expectations, causing the company's stock price to fall 5% in after-hours trading. Specifically, Tesla's earnings per share in 2023 will be $3.12, a 23% decrease from $4.07 in 2022. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $16.6 billion, down 13% from $19.2 billion in 2022. This downward trend has occurred for Tesla for the first time since 2017, causing market concern and concern. Analysts believe that this is mainly due to factors such as global chip shortages, supply chain issues, and rising raw material costs. Tesla also acknowledged these challenges in the report and said it would take steps to address and mitigate these issues. Despite the difficulties, Tesla has maintained strong sales and market share. The report shows that Tesla delivered about 1 million electric vehicles in 2023, setting a record high in the company's history. In addition, Tesla continues to promote its global expansion plan, including the construction of new production bases and super charging stations to meet daily needs.

According to the editor’s understanding, Tesla Revenue in the fourth quarter report was $25.17 billion, a year-on-year increase of 3%. However, earnings per share were only $0.71, down 40% year over year. This is mainly due to Tesla's repeated reductions in car product prices. Due to the impact of the price reduction strategy, gross profit margin in the fourth quarter fell to 17.6%, the lowest level since 2019 and a decrease of more than 600 basis points from the same period last year.

Despite the pressure of weak profits, Tesla still achieved a historic breakthrough in revenue in 2023, reaching US$96.8 billion, a year-on-year increase of 19%. In the past year, Tesla delivered a total of 1.8 million vehicles, including 484,500 vehicles in the fourth quarter, setting a new delivery record. This data shows that although Tesla's price reduction strategy successfully increased sales, it did not bring corresponding profit growth.

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