Published: Sunday, March 2, 2025 · 4:30 AM | Updated: Sunday, March 2, 2025 · 4:30 AM
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Tesla (TSLA, Financial) CEO Elon Musk recently stated on the X platform that he believes a 1000% profit growth for Tesla over the next five years is possible. This comment was in response to financial host Jon Erlichman’s prediction that Tesla’s profit growth could reach 258% over five years, surpassing companies like NVIDIA, Amazon, Netflix, and Microsoft.
Tesla’s profitability has seen significant fluctuations. After achieving its first profit in 2020 with a net income of $721 million, Tesla’s net income skyrocketed to $14.997 billion in 2023, reflecting a compound annual growth rate of 175.02%. However, in 2024, net income dropped sharply to $7.091 billion, a 52.72% decrease, with revenues, profits, and gross margins all falling short of analyst expectations.
Despite record quarterly deliveries, Tesla’s 2024 sales were disappointing, marking the first decline since 2013. Total sales reached 1.7892 million units, a 1.1% year-over-year decrease, with a 10% decline in the U.S. market affecting the overall sales of electric vehicles in the country. In Europe, Tesla’s sales were impacted by Musk’s political interventions, with a 45% drop in January sales.
Tesla’s stock price has also been affected, declining over 40% from its December peak to $292.98 per share. Following the 2024 sales announcement, investment banks like Stifel and Truist Securities lowered their price targets for Tesla.
Musk sees potential in Tesla’s humanoid robots, with plans to produce thousands by 2025 and significantly increase production in subsequent years. This could become a new growth avenue for the company.
In other automotive news, BYD led the market with February sales of 322,800 units, a 164% year-over-year increase, while Geely sold 98,400 electric vehicles, up 194%. Emerging companies like Xpeng Motors also reported impressive growth, with a 570% increase in deliveries.
Overall, China’s new energy vehicle sector is thriving, with a 38.7% increase in production in 2024. The automotive industry’s performance is generally positive, with many companies reporting profit growth and some reversing losses.
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