Tesla’s Q4 2023: Operating Margin Shrinks, But Net Profit Doubles

On January 24, 2024, Tesla announced its 2023 Q4 financial results. Operating profit decreased by 47% compared to last year’s period at $2.064 billion, marking the fourth consecutive quarter of decline. The price reductions and unstable production of the Cybertruck contributed to this. However, due to a temporary customs-related profit, the net profit was more than double that of the same period last year, at $7.928 billion.

Since the fall of 2022, Tesla has been lowering prices in the United States and China to boost sales. However, the results have fallen short of expectations in increasingly competitive markets. The deterioration of profitability due to price reductions is particularly noticeable. Additionally, it is pointed out that issues such as the use of stainless steel in the Cybertruck and the difficulty in matching the yield of the 4680 batteries lead to an unstable supply.

The number of units sold in the fourth quarter increased by 20% to 484,507 units, but sales revenue only increased by 3% to $25.167 billion, a 7% decrease from the third quarter. The unit price of the product dropped by 15% to $45,000. The operating profit fell from 16% in the same period last year to its half at 8.2%. Although it improved from 7.6% in the third quarter, it is less than half of the 19.2% in Q1 2022.

Meanwhile, according to U.S. market research firm Cox Automotive, Tesla’s market share in the U.S. electric vehicle market fell by 7 points, from 58% in the same period last year to 51% in Q4 2023.