Tesla reported a net income of $7.9 billion on $25.2 billion in revenue in the fourth quarter of 2023. These figures indicate an increase in income compared to $24.3 billion for the same period last year.
The company's profit margin has slightly improved, but still remains lower than the previous year. The company reported a profitability of 8.2%, slightly higher than 7.6% in the previous quarter, but lower than last year when it was 16%.
Previously, Tesla had a historical profit margin rate, sometimes reaching 20%, but a series of price reductions led to its once acclaimed profit margin rate falling to a more grounded level, causing concern among investors.
Another factor is that fewer Tesla vehicles now qualify for federal tax credits for electric vehicles due to new material supply rules for batteries. The Model 3 performance, Model X long-range, and three versions of Model Y still qualify for the full $7,500 tax credit.
It was a significant quarter for the company, with the long-awaited release of the Cybertruck. However, recent high-profile stories, such as Hertz replacing part of its Tesla fleet with gasoline engine vehicles and disruptions in the Tesla charging network in cold cities like Chicago, have compounded the company's prospects for 2024, The Verge reports.
Tesla is also facing an existential issue of losing its position as the world's leading electric car manufacturer to BYD. The Chinese company claimed to have produced 3.02 million electric vehicles in 2023 compared to Tesla's 1.81 million. However, BYD's figures include 1.6 million electric vehicles and 1.4 million hybrid vehicles, so Tesla can still claim the top spot among pure electric vehicle manufacturers.
The company also predicts that its growth rates in 2024 could be significantly lower than in 2023 as it works on launching the next generation of transportation vehicle.
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