DETROIT (AP) — Tesla’s net income more than doubled last quarter thanks to a one-time tax benefit but it warned of “notably lower” sales growth this year.

During the months of October through December, the company based in Austin, Texas that specializes in vehicles, solar panels, and batteries reported a net income of $7.93 billion. This is a significant increase from the $3.69 billion net income reported in the same period last year.

Excluding exceptional items such as the noncash tax benefit of $5.9 billion for deferred tax assets, the company’s earnings totaled $2.49 billion, equivalent to 71 cents per share. This marks a 39% decrease from the previous year and fell short of the predictions made by analysts. According to data provider FactSet, analysts had anticipated earnings of 73 cents per share.

Tesla’s revenue for the quarter was $25.17 billion, showing a 3% increase compared to the previous year. However, this figure falls short of the estimated amount of $25.64 billion by analysts.

Tesla’s profits decreased due to its global price reductions throughout the year, as part of a strategy to increase sales and gain more market share.

In the beginning of this month, Tesla announced that their sales in the fourth quarter increased by nearly 20%, driven by significant reductions in prices both in the U.S. and globally throughout the year. Certain reductions even reached up to $20,000 on more expensive models.

Tesla Inc.’s stocks dropped by 4.4% in after-hours trading on Wednesday.

The rate of growth in Tesla’s sales was not as fast as in previous quarters. Throughout the entire year, their sales increased by 37.7%, falling short of CEO Elon Musk’s prediction of a 50% growth rate in most years. The company announced that they delivered a total of 484,507 vehicles during the quarter. As usual, the majority of Tesla’s sales were from their more affordable Models 3 and Y.

In the fourth quarter, the rapidly expanding Chinese company BYD overtook Tesla as the leading seller of electric vehicles in the world.

In a letter to investors published after the market closed on Wednesday, Tesla warned that their sales growth this year may be significantly less than the growth rate projected for 2023. This is due to their focus on launching a new generation vehicle at their factory in Austin, Texas.

According to the letter, the company is currently experiencing two major periods of growth. One is due to the worldwide expansion of the Models 3 and Y, while the other is expected to come from the upcoming next-generation vehicle.

Tesla announced that there will be an increase in Cybertruck deliveries throughout the course of this year. The company also stated that revenue growth from energy storage is expected to exceed that of the automotive business in the same time period.

The company stated that the ramping up process for the Cybertruck is anticipated to take longer than other models due to its intricate manufacturing.

The gross profit margin for Tesla decreased to 17.6% in the quarter, a decline of 3.8 percentage points compared to last year due to lower profits caused by price reductions.

In the entire fiscal year, Tesla recorded a total profit of nearly $15 billion, which includes a one-time tax advantage. Without this advantage, the company earned $10.88 billion, showing a 23% decrease from the previous year. The gross profit margin for 2022 was 25.6%, but it declined to 18.2% in the following year.

During the fourth quarter, Tesla announced the release of its updated “Full Self-Driving” software to its employees and a selected group of customers for testing. This new version utilizes artificial intelligence to assist with steering and pedal control, rather than manually programming all driving actions. However, the system is not yet capable of completely driving on its own, and Tesla emphasizes that owners must be prepared to take over at any moment.

Source: wral.com