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Products and results matter. While Tesla stock doubled in 2023, backed by its U.S. EV market share, the growing Supercharger network commitments from other automakers, and the excitement of the incoming Cyertruck, 2024 isn’t looking as hot for the company.

In the wake of winter weather glitches experienced by Tesla drivers, including dead batteries, inability to charge, and Cybertruck performance and maintenance concerns, not to mention ongoing criticism of Musk, Tesla released its 2023 Q4 earnings.

Tesla’s Q4 earnings report

While showing a 3% increase in revenue over Q3, Tesla’s Q4 landed $500 million short of expectations. Its operating margin halved compared to Q4 2022. Its automotive segment revenue showed only 1% growth over the previous quarter. While net income grew by $7.9 billion, $5.9 billion of this was a one-time non-cash tax benefit, according to CNBC.

Musk cited multiple barriers to missing forecasts, including retail price cuts, high interest rates, and increased operating costs in AI and robotics.

Peter Cohen, a senior contributor at Forbes, has doubts about the company’s future. “Investors who hold on to Tesla shares will suffer,” he said in an op-ed this week.

The Cybertuck isn’t what people need or want

A Tesla Cybertruck parked in an urban setting at right front angle
Tesla Cybertruck | Roman Tiraspolsky via iStock

Critics, including Cohen, are concerned that the Cybertruck, Model 3, and Model Y won’t meet global market demand, which is at risk of being completely filled by Chinese EV manufacturers like BYD.

BYD released an EV called the Seagull in China last April with an MSRP of only about $11,000. Overall, BYD produced more than 3 million EV units in 2023. This was a 61.9% increase over 2022. Tesla did not provide a production estimate for 2024 but stated that it would likely be lower than 2023. While selling out on Cybertruck reservations, starting prices ranging from $61,000-$99,000 will certainly limit mass adoption.

Musk isn’t interested

Musk blamed high interest rates on consumers lacking the ability to afford Tesla’s vehicle lineup. This lack of focus on what Tesla could do to remediate the barriers at play is turning analysts off from investing confidently.

Furthermore, Musk has publicly complained that Tesla’s board isn’t giving him enough voting power and that these days, he prefers to concentrate his attention outside of Tesla if they don’t appease him.

Sources: Forbes, BYD, CNBC