Tesla 2023Q4 Earnings & Call/Tesla is making great efforts, but… I can’t help it with this owner risk
Recession issues are also a problem. The most noticeable factor in this earnings call is the energy sector, which has more than doubled its margin. If the market recovers, Tesla is expected to rise with new raw data.  

Breaking News: Tesla Reports Q4 Earnings.

$TSLA Tesla Earnings Release (Q4 FY23)

• +3% Y/Y revenue $25.2 bln (less than $0.6 bln)
• gross profit of 18% (-6%p year-on-year)
• Operating margin of 8% (-8%p year-on-year)
• Facility investment +24% year-over-year $2.3 billion
• Excess cash flow +45% year-over-year $2 billion
• Non-General Accounting Standards EPS of $0.71 (less than $0.03)
• Delivery unit +20% year-on-year 485,000 units
• FY24: “Volume growth may be significantly lower”

Highlights:

• EPS (non-GAAP): expected to be $0.71 versus $0.73
• EPS (GAAP): $2.27 versus $0.59 expected
• Earnings: $25.17 Billion vs Estimated $25.7 Billion
• Total GAAP gross margin: 17.6%

What was different from what I thought in 4Q23 earnings

• Growth in energy sales was lower than expected (logistics problem)
• Didn’t think FSD Deferred Sales Recognition would diminish (since FSD Beta Wide Release in 22)
• I didn’t know how to express “Next generation platform” so bluntly
  Above all, if the operating margin is 8.2%, it’s a serious situation, but the stock price seems to be too overvalued. Crisis theory is more dominant than I thought
• EPS (non-GAAP): $0.71 (estimated $0.73)
• EPS (GAAP): $2.27 (estimated $0.59)
• Revenue: $25.17B (estimated $25.7B)
• • Total GAAP gross margin: 17.6%
• • Free cash flow of $2.1B

1. Cost of products sold per vehicle fell for the fourth quarter in a row.

• Sales costs per vehicle fall from $37,500 in Q3 to around $36,250 in Q4
• The Tesla team continues to focus on increasing production, investing in future growth, and finding additional cost-effectiveness in 2024. Our company is currently in between two major growth waves: the first started with a global expansion of the Model 3/Y platform, and we believe the next wave will start with a global expansion of the next generation of vehicle platforms.

In 2024, vehicle volume growth may be significantly lower than growth achieved in 2023 during the next-generation vehicle rollout at the Texas Gigafactory. In 2024, deployment and revenue growth in the energy storage business is expected to outpace the automotive business.

✅ TSLA 4Q Earming

• • Revenue +3% Y/Y to $25.2B ($0.6B miss).
• • Gross margin 18% (-6pp Y/Y).
• • Operating margin 8% (-8pp Y/Y).
• • Capex +24% Y/Y to $2.3B.
• • Free cash flow +45% Y/Y to $2.0B.
• • Non-GAAP EPS $0.71 ($0.03 miss).
• • Deliveries +20% Y/Y to 485K.
• • FY24: Volume growth “may be notably lower.”

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TSLA 4Q Earming

• +3% Y/Y revenue $25.2 bln (less than $0.6 bln)
• gross profit of 18% (-6%p year-on-year)
• Operating margin of 8% (-8%p year-on-year)
• Facility investment +24% year-over-year $2.3 billion
• Excess cash flow +45% year-over-year $2 billion
• Non-General Accounting Standards EPS of $0.71 (less than $0.03)
• Delivery unit +20% year-on-year 485,000 units

✅ FY24: “Volume growth may be significantly lower”

2. GigaTexas plans to begin production, focusing on bringing next-generation platforms to market as soon as possible.
3. The Fremont plant produced 560,000 vehicles in 2023 with 20,000 employees. We are focused on bringing the next generation platform to the market as soon as possible, and we plan to start production at the Gigafactory in Texas. The platform will revolutionize the way vehicles are manufactured.
4. Cybertruck has manufacturing complexity and will have a longer launch period than other models. Cost of Sales per Vehicle (COGS) has continued to decline, approaching $36,000. Despite approaching the cost-cutting limits of our existing vehicle lineup, our team continues to focus on additional cost savings at all stages of production, from raw materials to final deliveries.
5. Tesla’s cumulative miles driven in FSD beta were approximately 750 million miles
6. Tesla has two growth waves in 2024, the first already begun with the global expansion of the Model 3/Y platform. The second starts with the global expansion of the next generation of vehicles.
7. In 2024, Giga Texas’ growth in vehicle production may be significantly lower than the growth achieved in 2023. This is because we are working to produce the next generation of vehicles.

[23 Q4 Earnings Summary]

1️⃣Major performance figures

• • EPS (Non GAAP): $0.71 vs $0.73 est
• • EPS (GAAP): $2.27 vs $0.59 est
• Earnings: $25.17 Billion vs $25.61 Billion Est
• Total GAAP Gross Margin: 17.6%

2️⃣ Performance details

1. Total Earnings: Up 3% YoY To $25.2 Billion In Q4; Items Affected Earnings

• an increase in vehicle deliveries
• growth in other parts of the business
• Positive FX Impact Of $0.1 B1
• Reduced vehicle average selling price (ASP) (FX impact including adverse impact)
• Q4 FY22 FSD Beta Widespread Releases In North America, Low Year-over-Year FSD Revenue Awareness

1. Operating profit: $2.1 billion down year-over-year in Q4, operating margin of 8.2%. Mainly affected by:

• Vehicle ASP reduction due to price and mixing
• Increase in operating costs driven in part by AI and other R&D projects
• Q4 FY22 FSD Beta Widespread Releases In North America, Low Year-over-Year FSD Revenue Awareness
• Cybertruck Production Lamp Cost
• Lower costs per vehicle, including low raw material costs, logistics costs and IRA credit benefits
• an increase in vehicle deliveries
• Gross profit growth in energy production and storage

It received $5.9 billion in one-off non-cash tax benefit in Q4, though it didn’t affect operating profit

Valuation allowances for certain deferred tax assets.

3. CASH FLOWS: Quarter-end cash, cash equivalents and investments rise to $2.91 billion from $300 billion in Q4 due to free cash

$210 million flow and $990 million in financing activities.

3️⃣ Prospects

1. Vehicle Sales Growth: 2024 may be significantly lower than the growth achieved in 2023. Given the manufacturing complexity of Cybertruck, we expect it to take longer to start mass production compared to other models.
2. Texas Gigafactory is working to launch its next generation vehicle.
3. The revenue of the energy storage business should outperform that of the automotive business.
4. We have enough liquidity to finance product roadmaps, long-term capacity expansion plans, and other costs.
5. Hardware-related profits involve the acceleration of AI, software, and vehicle sales-based profits.
6. Cybertruck production and deliveries will grow throughout the year. In addition, we are continuing to make progress. Tesla Plans to Produce Production Of Inclusive Models Next Year

Tesla, a leader in the electric vehicle market, plans to produce a $25,000 entry-level model called Redwood from the middle of next year, Reuters said. In the fourth quarter of last year, China’s BYD topped Tesla in electric vehicle production. Tesla announced its plan to produce 10,000 units per week when mass-produced, signaling a competition among Chinese companies with low-cost EVs.

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