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Tesla Earnings Miss Forecasts, Warns About Slower Growth

Tesla Inc. shares plunged after Elon Musk’s pitch for investors to look past slower sales growth fell flat.

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The stock fell as much as 10% on Thursday morning after Tesla narrowly missed earnings estimates and warned its rate of expansion will be “notably lower” this year. The company spent all of 2023 cutting prices to boost sales, which ate into profits.

The effectiveness of that strategy is waning, and executives cautioned they’re approaching the limits of efforts to cut costs on the current vehicle lineup.

“Tesla is signaling that the days of 50% or even 30% to 40% growth year-over-year is not going to happen in 2024,” Seth Goldstein, a Morningstar Research analyst, said in an interview. “At a certain point, you can’t cut prices anymore.”

In a departure from past practice, Tesla avoided offering specific targets for the year ahead. The company fell well short of the 50% annual growth that management guided to in the past despite slashing prices throughout 2023. Vehicle deliveries rose 38%, and analysts are predicting a 20% increase this year.

Tesla shares are having their worst start ever to a year. Thursday’s slump is the steepest intraday drop in three months, and the stock is now trading at its lowest since May.

Image: Tesla