Tesla’s stock surf stalls as Musk bids adieu to growth targets: Liam Denning

In Liam Denning's analysis, Tesla's recent fourth-quarter results reflect a challenging year, marked by a significant increase in vehicle sales but a one-third decrease in operating profit. This decline is attributed to several price cuts aimed at sustaining demand, resulting in a 15% reduction in implied revenue and a 44% drop in gross margin per vehicle. Denning highlights Tesla's deviation from its earlier guidance of achieving 50% compounded annual growth in vehicle production, signalling a potential miss in 2024. He emphasises the significance of Tesla's upcoming mass-market electric vehicle (EV), set for production in mid-2025, as crucial for the company's future success. Despite past achievements, Tesla faces growing competition in the EV market, and concerns about the company's valuation persist. Denning suggests that Tesla's optimistic narrative and focus on artificial intelligence may not entirely offset the need for sustained growth and a more diverse product lineup.

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By Liam Denning

Henceforth, no company should ever say they are experiencing a slowdown. Tesla Inc. has redefined this experience as being "between two major growth waves."

Full marks to whomever coined that surfer-dude promise of the doldrums soon giving way to another thrilling ride. Tesla's infeasibly buoyant stock demands nothing less.

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