The rumours were all just rumours then. Tesla reported its earnings for Q4 2023 and with it, it gave out a crucial bit of information.
Elon Musk announced on Wednesday that the $25,000 EV will go into production in late 2025 at the company’s Texas factory. He added that it’s the only viable location “because we really need the engineers to be living on the line.” Production of the EV will then expand to an upcoming factory in Mexico. This is expected to happen only in 2026. Musk then went on to add that Tesla will identify a third facility outside of North America for production of the $25,000 EV. The keen-eyed among you would have noticed that there’s no mention of India. So, an Indian factory for Tesla’s most affordable car doesn’t seem to be on the horizon, at least for now.
This is significant because there were reports that Tesla would announce the construction of a factory at the Vibrant Gujarat Summit a couple of weeks ago. Elon’s statement solidifies that Tesla fans in India will have to wait as the country doesn’t appear to be in the plans of the maker of the world’s largest-selling car.
Tesla’s fourth-quarter earnings report tells us that the electric carmaker is making significantly less profit on each car it sells than it was last year. The company’s operating margin in Q4 2023 has reduced to 8.2%, way off the 20 percent margins that made it the darling of investors. That said, it has to be mentioned that the company’s automotive gross margins stood at 17.2 percent.
Tesla’s R&D costs and challenges with Cybertruck production seem to dragging its profit down. Additionally, Tesla has been aggressively discounting its cars in key markets like China. As a result, even though Tesla sold a record 1.8 million cars last year, it didn’t improve its profit or even revenue by much.
The company even goes on to caution that it is currently “between two major growth waves.” Tesla says its sales growth “may be notably lower” in 2024 as it prepares to launch a new vehicle platform for a smaller EV that costs around the $25,000 mark.
The news has hit Tesla’s stock price which has nosedived almost 30 percent in the last month. $80 billion was wiped out from the company’s valuation after the earnings report was made public.