On January 25th, Tesla (TSLA, stock price of $207.83, market value of 660.675 billion yuan) released its 2023 financial report, which showed that Tesla's total revenue for the year 2023 reached $96.773 billion, a year-on-year increase of 18.79%; The net profit attributable to common shareholders was 14.997 billion US dollars, a year-on-year increase of 19%; The net profit attributable to common shareholders under non GAAP was $10.882 billion, a decrease of 23% year-on-year, while Tesla also experienced its first annual profit decline since 2017.
The significant increase in total revenue in 2023 is mainly due to Tesla's rapid increase in new car deliveries worldwide. Official data shows that in 2023, Tesla delivered a total of 1.81 million new cars globally, a year-on-year increase of 38%, achieving its annual delivery target.
Tesla CEO Elon Musk stated during the 2023 earnings conference call that the sustained growth in revenue exceeded market expectations and provided strong support for Tesla's research and development investment, product strength improvement, and corporate operations in the new year.
According to the financial report, Tesla's R&D expenses for the entire year of 2023 reached a historic high of 3.969 billion US dollars (equivalent to approximately 28.39 billion Chinese yuan). "The data fully proves that Tesla continues to invest its main energy and resources in the most core research and development, continuously improving its product's hardcore strength," Tesla said.
However, based on the performance in the fourth quarter of 2023, Tesla's performance was not ideal. According to the financial report, Tesla's total revenue in the fourth quarter of 2023 was $25.17 billion, lower than the previous analyst's estimate of $25.87 billion; The net profit was 7.928 billion US dollars, a year-on-year increase of 115%; Adjusted earnings per share for the fourth quarter were $0.71, lower than analyst expectations of $0.73.
Moreover, Tesla's gross profit margin continued to decline in the fourth quarter of 2023, dropping from 17.9% in the third quarter to 17.6%, a decrease of over 6.2 percentage points from 23.8% in the same period in 2022, lower than market expectations of 18.3%. In 2023, Tesla's gross profit margin was 18.2%, a decrease of 7.35 percentage points compared to 2022. "The decrease in gross profit margin is mainly affected by the decrease in the average selling price of vehicles," Tesla explained.
Goldman Sachs analysts believe that the main adverse factors faced by Tesla include a larger than expected decline in car prices, increased competition in electric vehicles, and delays in products and functions such as FSD and third-generation platforms. Therefore, although the company has long-term growth potential, it faces significant risks in the short term.
Morgan Stanley also stated that the imbalance between supply and demand of electric vehicles may bring pressure to Tesla this year. "In the coming year, the demand for electric vehicles is bound to slow down. Tesla will have to choose whether to continue cutting car prices to maintain competitiveness or to maintain price stability in 2024," said an analyst at well-known US investment bank Wedbush.
It is reported that Tesla has been trying to reduce costs in production cost control, from engineers, design teams to production processes, as well as negotiating with upstream suppliers to control costs. "The cost control of hardware and software on the previous generation production platform has approached its limits," Tesla senior management said. With the update of the new generation production platform, there will be more room for exploration.
According to Musk, Tesla's next generation car is expected to enter production in the second half of 2025. "The production of new car models will be a challenging project, and once optimized, it may change the game rules of car production," Musk said.
Tesla did not disclose its delivery targets for 2024 during the 2023 financial report conference call, but it was clear that as the company is developing the next generation of vehicles, the growth in production, delivery, and shipment in 2024 will slow down and may be significantly lower than in 2023.