Tesla Inc’s fourth-quarter profit fell below Wall Street expectations and the company failed to provide a clear target for vehicle deliveries in 2021, causing shares to fall more than 7% in extended trade .
Wednesday’s disappointing results come after shares of the electric automaker led by CEO Elon Musk have jumped nearly 700% in the past 12 months, an assessment rooted in expectations that Tesla will grow quickly and grow rapidly. cost effective way.
Investors had hoped for a significant increase from the company’s 2020 delivery target of half a million vehicles, but Tesla provided only a vague perspective and did not state a target. concrete delivery.
“Over a multi-year horizon, we expect to achieve an average annual growth of 50% in vehicle deliveries. In some years, we may grow faster, which we expect to be in 2021, ”Tesla said in a statement.
The unclear indications also come after Musk raised hopes during an October results call.
Asked by an analyst on Wednesday whether Tesla intended to deliver 840,000 to one million vehicles in 2021, based on the current maximum capacity of its factories, Musk replied that the target was “within this neighborhood, ”while another Tesla executive said the company would provide advice afterwards. trimester.
Tesla Chief Financial Officer Zachary Kirkhorn said the company was “working extremely hard” to manage production amid a global semiconductor shortage that has upset the auto industry, but did not elaborate.
Tesla delivered 180,570 vehicles in the fourth quarter, a quarterly record, although it narrowly missed its ambitious 2020 target of half a million deliveries.
“After Tesla’s unprecedented run in 2020, investors were expecting substantial profit and another major target for car deliveries in 2021,” said Haris Anwar, senior analyst at Investing.com.
On an earnings call, investors and analysts were keen to hear more about Tesla’s pace of growth, especially when it would set aside more revenue for its automated driving features, but received few concrete responses.
Tesla lets customers buy an $ 8,000 software update it calls “Full Self Driving,” but has yet to reserve much of that revenue because the feature has yet to be widely released. with consumers.
As Tesla broadly increased deliveries, the company said on Wednesday that the average selling price per vehicle fell 11% on an annual basis, with more consumers switching to the cheaper Model 3s and Ys.
Net income excluding stock compensation payments to Musk rose to $ 903 million from $ 386 million last year, but the company fell short of average analysts’ expectations for quarterly profit of $ 1.08 billion dollars, according to data from Refinitiv.
At $ 10.74 billion, Tesla’s quarterly revenue slightly exceeded analysts’ expectations of $ 10.4 billion.
The Palo Alto, Calif., Based company, which joined the ranks of the prestigious S&P 500 stock index last month, said operating margins fell to 5.4% in the last quarter, from 9.2% in the last month. during the previous three months. He blamed aggressive price cuts in China, supply chain costs, and a big wage package for Musk and other executives.
Under Musk’s leadership, Tesla significantly expanded its footprint in 2020, facing a pandemic and economic upheaval with stable sales and profitable quarters at a time when many automakers have reported losses.
The high-profile CEO, who also heads rocket maker SpaceX, said on Wednesday that he plans to lead Tesla for several years, but added that it would be “nice to have a little more free time between my days. hands”.
Throughout 2020, Tesla ramped up production in China, and last month began selling its locally-made Model Y sport utility vehicle at a price that analysts say will disrupt the market for conventional high-end cars. But the company faces growing competition from local challengers including Nio Inc and Xpeng Inc.
Tesla has also started building vehicle and battery manufacturing plants near Berlin, Germany, and Austin, Texas, and said Wednesday it remains on track to begin deliveries from each. site this year.
But in the auto industry, the race is now on to develop electric vehicles to meet emissions targets and challenge the market leader of Tesla.
Several automakers are expected to launch new electric vehicle models this year, including sport utility vehicles to compete with the Model Y, such as Mustang Mach-E from Ford Motor Co and ID.4 from Volkswagen AG. The Tesla Cybertruck challenges that have yet to be released come from General Motors Co.’s Hummer electric truck.
Tesla said Wednesday that Cybertruck’s volume production would begin in 2022.
Rising sales of electric vehicles by Tesla’s competitors are also expected to drain the company’s revenue from environmental regulatory credits, which it sells to other automakers.
In the fourth quarter, $ 401 million, or 4% of Tesla’s auto revenue, came from these credits.