The outlook eased concerns over the EV market after Tesla earlier this month reported its first annual decline in vehicle sales in over a decade. Still, the company stopped short of committing to the ambitious goals recently laid out by Chief Executive Officer Elon Musk, who has predicted as much as 30% growth this year.
The shares rose 3.2% at 5:11 p.m. in extended New York trading, erasing an earlier decline. The stock’s value has climbed more than 80% since the last time Tesla reported earnings, highlighting how investors are looking past financial results and are using the company as a vehicle to invest in the prospects of Musk himself.
Musk has become ever-more involved in new projects, from his social-media company X to his backing of President Donald Trump and efforts to slash US government spending.
Adjusted earnings were 73 US cents a share for the quarter, missing analysts’ average estimates of 75 US cents.
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Tesla said plans to sell more affordable vehicles remain on track, with production set to start in the first half of this year. The Cybercab also is on track for 2026.
The company said it plans to make the new vehicles using a mix of current production methods and a next-generation platform. The strategy will lead to higher costs than previously expected but will allow Tesla to expand vehicle volumes more efficiently during “uncertain times.”
The company generated US$692 million in revenue from the sale of regulatory credits to car manufacturers that need to comply with strict pollution standards. That’s below the US$739 million it reported in the previous quarter.
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Garrett Nelson, an analyst with CRFA, said the outlook is being positively received by investors because it seems more grounded following a tough 2024.
“The bar has been lowered to much more achievable levels, so therefore they are much more likely to hit it going forward,” Nelson said.
He added that Musk’s relationship with Trump is also seen as a positive as Tesla focuses on autonomy and the potential for changes to federal regulations.
“Musk has the president’s ear,” Nelson said. “He’s going to have a major place at the table as far as what the regulatory framework looks like — and we think it will be favourable to Tesla.”
