Tesla’s stock price saw a nearly 4% surge in early trading on Thursday following the release of its Q4 2024 earnings report. While the financial results were mixed, with revenue and earnings slightly below analyst expectations, several key announcements, particularly regarding the expansion of its Full Self-Driving (FSD) beta program, appear to have driven investor confidence.
Examining Tesla’s Q4 2024 Performance and Outlook
Tesla reported Q4 revenue of $25.7 billion, falling short of the anticipated $27.2 billion. Adjusted earnings per share were $0.73, also below the consensus estimate of $0.75. Full-year 2024 revenue saw a modest 1% increase to $97.7 billion. These figures represent a slowdown in growth compared to previous years, attributed to factors such as increased R&D spending, lower average selling prices, and a challenging global economic environment.
Despite the mixed financial performance, Tesla’s outlook for 2025 appears to be more optimistic. The company anticipates a return to growth in its auto business, driven by advancements in its autonomous driving technology and the launch of new products. Specifically, CEO Elon Musk announced the expansion of the unsupervised FSD beta program to Austin, Texas in June, with plans for nationwide availability by the end of 2025 and global expansion by the end of 2026. This ambitious rollout of FSD technology is likely a significant contributor to the recent stock price increase.
Full Self-Driving (FSD) as a Catalyst for Growth
Analysts believe that the projected widespread adoption of FSD could be a game-changer for Tesla. Wedbush analyst Dan Ives highlighted the significance of unsupervised FSD, suggesting it will be a focal point for bullish investors. The potential for a fully autonomous driving system to revolutionize transportation and generate substantial revenue streams is a key factor underpinning Tesla’s long-term growth narrative. While the timeline for achieving full autonomy remains uncertain, Musk’s confidence in the technology’s progress seems to have resonated with the market.
Additional Factors Contributing to Tesla’s Stock Movement
Beyond FSD, other factors may have contributed to the recent stock price increase. Tesla reiterated its commitment to launching more affordable vehicle models in early 2025, potentially expanding its market reach. The company’s energy storage business also continues to show strong growth, with deployments projected to increase by 50% year-over-year.
While Tesla faces challenges related to production capacity, cost management, and increasing competition, the company’s forward-looking statements regarding FSD, new product launches, and energy storage growth appear to have instilled renewed optimism among investors. This positive sentiment, combined with CEO Elon Musk’s influential role in the current political landscape, likely contributed to the recent upward movement in Tesla’s stock price. However, it’s crucial to remember that the stock market is volatile, and future performance will depend on Tesla’s ability to execute its ambitious plans and navigate a complex and evolving automotive market.
