40 percent of its profit came from selling regulatory credits.

AI Summary:

Tesla’s 2024 financial results were disappointing, with several key points highlighted:

  • Automotive Revenues: Fell by 8% in Q4 2024 compared to Q4 2023, totaling $19.8 billion.
  • Energy and Storage Revenues: More than doubled, growing by 113% to $3 billion in Q4 2024.
  • Services: Grew by 31% in Q4 2024, contributing $2.8 billion.
  • Total Revenue: Increased by 2% in Q4 2024, but income fell by 23%, with an operating margin of 6.2%.
  • Net Profits: Dropped by 71% to $2.3 billion in Q4 2024.
  • Annual Performance: Automotive revenues decreased by 6% to $77 billion in 2024. Energy generation and storage increased by 67% to $10 billion. Services grew by 27%, bringing in $10.5 billion.
  • Gross Profits: Fell by 1%, with net profits dropping by 53% to $7.1 billion for the year.
  • Free Cash Flow: Decreased by 18% to $3.6 billion.
  • Regulatory Credits: $2.8 billion of profit came from selling regulatory credits, not from core business activities.
  • Future Predictions: Tesla expects energy storage revenues to grow by at least 50% year-over-year and aims to grow automotive sales by more than 60% in 2025.

Despite the poor financial results, Tesla’s share price increased by 103% over the same period.

  • Corkyskog@sh.itjust.worksEnglish
    70·
    14 hours ago

    So more than a third of their net profits come from selling credits they received from the government? Am I understanding that correctly?

    • sushibowl@feddit.nlEnglish
      16·
      7 hours ago

      They are emissions credits. Every company receives some amount of “CO2 emission credits” from the government. These allow you to emit a certain amount of carbon dioxide. If you don’t emit all the CO2 that your credits allow, you can sell those credits to other companies that need more than the government gives them.

      The idea is to put a total limit on the amount of emissions in the country, while letting the market figure out where it makes most sense economically to invest in emission reduction.

      Tesla makes only EV cars and so it doesn’t need all the credits a typical gasoline car company would receive. So they sell them.

    • crystalmerchant@lemmy.worldEnglish
      29·
      10 hours ago

      Yes you are understanding that correctly. For producing EVs, they get credits from the federal government. I don’t know the exchange rate – e.g., how many EVs per credit.

      Then, Tesla turns around and sells these credits to buyers, usually other companies. Companies buy these credits from Tesla to comply with regulations requiring certain environmental outcomes, and credits count towards these outcomes.

      In theory this type of program incentivizes and rewards companies who invest in the technology(is) tied to these credits, in this case EVs. In practice it’s a way for other companies to comply with renewables regulations without actually doing anything to meaningfully reduce their impact and footprint (other than buying credits)

      • Rogue@feddit.ukEnglish
        111·
        10 hours ago

        So it’s a government subsidy at no cost to the government, funded instead by other companies? That’s actually quite a neat idea.

        I guess the issues arise if Tesla just pockets the subsidy without passing on the savings to savings to people buying EVs

        • AA5B@lemmy.worldEnglish
          22·
          6 hours ago

          Why is this an issue. They have their incentive to keep building and selling. As long as they’re building and selling, it doesn’t matter to the rest of us what their profit is.

          If they’re building make excess profit, that’s just more opportunity for legacy manufacturers to be competitive. Capitalism 101

      • AA5B@lemmy.worldEnglish
        12·
        6 hours ago

        Right, we want EVs, Tesla gets a little boost from legacy manufacturers, so now we have a market, EVs are available. GM gets a break do it has time to design EVs, but are really annoyed at funding that bastard Elon, so have incentive to get their shit together. EVs are built a little sooner m, no one goes out of business (yet), we all win

    • Wispy2891@lemmy.worldEnglish
      1·
      8 hours ago

      I think it’s from Europe. Car manufacturers in Europe must sell at least n ev every year. Stellantis, that was asleep at the wheel and only has undesirable EVs that don’t sell, is paying billions to Tesla to make a fictitious alliance, so they will meet the sales target and won’t pay the fine