Despite increased sales of energy products, reliance on a limited vehicle lineup could challenge Tesla's market position in the future.
Tesla Faces Profit Decline Amid Growing Competition in EV Market
Tesla Faces Profit Decline Amid Growing Competition in EV Market
Electric vehicle giant Tesla sees significant drop in profits as competition intensifies, despite small rise in sales.
Tesla has reported a notable decline in profits for 2024, attributing the loss to escalating competition from electric vehicle manufacturers in China, Europe, and the United States. Under the leadership of Elon Musk, the company announced a profit of $2.3 billion for the last quarter of 2024, down from $7.9 billion in the same period the previous year. The substantial decrease was primarily influenced by a one-time tax benefit of $5.9 billion that inflated 2023's numbers, with Tesla's operating profit dropping 23 percent after excluding this special gain.
Despite the profit reduction, sales increased by 2 percent to $25.7 billion during the fourth quarter, compared to $25.2 billion in the same quarter of 2023. For the entire fiscal year, Tesla's profit fell to $7.1 billion, significantly down from $15 billion. Sales grew slightly to reach $97.7 billion from $96.8 billion in the prior year. Additionally, the company's ventures into battery sales, which support electric utilities and solar energy storage, have somewhat offset weaker car sales.
However, Tesla's strong dependence on its two primary models – the Model 3 sedan and the Model Y SUV – raises concerns about its ability to remain competitive as rivals continue to expand their electric vehicle offerings.
Despite the profit reduction, sales increased by 2 percent to $25.7 billion during the fourth quarter, compared to $25.2 billion in the same quarter of 2023. For the entire fiscal year, Tesla's profit fell to $7.1 billion, significantly down from $15 billion. Sales grew slightly to reach $97.7 billion from $96.8 billion in the prior year. Additionally, the company's ventures into battery sales, which support electric utilities and solar energy storage, have somewhat offset weaker car sales.
However, Tesla's strong dependence on its two primary models – the Model 3 sedan and the Model Y SUV – raises concerns about its ability to remain competitive as rivals continue to expand their electric vehicle offerings.
