Tesla’s Earnings Dive 70% in Previous Quarter


Following closely after Elon Musk’s recent email to X employees indicating that the social media site is “barely breaking even,” another of Musk’s endeavors has disclosed concerning financial information.

On Wednesday evening, Tesla unveiled its Q4 2024 earnings report, showing that the electric vehicle (EV) manufacturer achieved $25.7 billion in total revenue for the last quarter of the previous year. This amount signifies an almost two percent increase compared to the same timeframe in 2023.

Nevertheless, despite a slight rise in revenue, Tesla’s net income experienced a notable decline. The company reported a net income of $2.3 billion for Q4 2024—a staggering 70 percent decrease from the $7.6 billion it earned in Q4 2023. Net income indicates the company’s actual profit after subtracting expenses from total revenue.

As highlighted by *The Verge*, Tesla’s Q4 2023 net income was enhanced by a one-time, non-cash tax benefit of $5.9 billion, which significantly skewed its earnings for that period.

Although Tesla’s automotive sales increased by two percent compared to the previous year, a considerable amount of its profits is still derived from selling regulatory credits to other automakers. Tesla acquires these credits for free and sells them to companies needing them to comply with emissions regulations, allowing Tesla to secure a 100 percent profit margin on these sales.

In Q4 2024, Tesla generated $692 million from regulatory credit sales, rising from $433 million in the same quarter of 2023. Throughout 2024, Tesla earned $2.8 billion from these credit sales—an amount that surpasses its net profit for the entire quarter.

However, the sustainability of this revenue source is questionable. Former President Donald Trump and Republican legislators have previously indicated plans to eliminate the regulations that enable Tesla to profit from these credits. Currently, it remains uncertain if or when such alterations might take place.

While Tesla’s revenue growth might present a glimmer of hope, the steep drop in net income underscores the hurdles the company must contend with as it navigates a more competitive EV market and a shifting regulatory environment.