Tesla guides return to growth thanks to cheaper new models and self-driving

With the release of its financial results today, Tesla is guiding a return to growth in 2025 thanks to new models and self-driving.

Where did we hear that before?

After market close today, Tesla released its Q4 2024 financial results, and it missed Wall Street expectations on both revenue and earnings per share.

The stock dropped 5% on the news, but it quickly regained, and it is now up 4% – seemingly on Tesla painting a pretty outlook for 2025.

Tesla’s growth died in 2024.

Vehicle deliveries are down, income from operations is down -20%, and EPS is down 153% (122% non-GAAP).

It was objectively a bad year, yet Tesla’s stock is up 112% over the last 12 months.

Most of that has been attributed to shareholders trusting Elon Musk that Tesla will finally deliver its unsupervised self-driving this year and the CEO’s link to President Trump leading to presumed help in getting regulations out of Tesla’s way.

In its shareholders deck today, Tesla said that it plans a return to growth in 2025 thanks to new models and autonomy:

With the advancements in vehicle autonomy and the introduction of new products, we expect the vehicle business to return to growth in 2025.

The “new products” are the previously announced Model 3/Y based vehicles that are expected to be in the $30,000 to $40,000 range. They are expected to be unveiled soon as Tesla is still guiding a start of production in the first half of 2025.

Many people are still confused as to why we haven’t seen these vehicles yet, considering how soon they are supposed to be in production, but these are expected to very closesly resemble Model 3/Y and therefore, they might be hard to differentiate.

During the last earnings call, CEO Elon Musk said he sees Tesla achieving 20-30% growth in 2025.

This time, Tesla is not putting any number on its anticipated return to growth in its automotive business and it linked the growth rate to the following:

The rate of growth will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment. We expect energy storage deployments to grow at least 50% year-over-year in 2025.

Musk also linked his last growth prediction to Tesla advancing autonomy. His latest prediction, for what it is worth considering his track record, is that Tesla will finally deliver its unsupervised self-driving in California and Texas around Q2 2025.

Virtually every expert disagree with this and Tesla never shared any data suggesting that this is a possibility.

In fact, crowdsourced data about Tesla’s FSD program points to the company being years away from achieving its goal.

Electrek’s Take

This time! This time is the right one.

To be fair, I do believe that more affordable Tesla models are coming. However, I have doubts about how much they can contribute to Tesla’s growth. I anticipate significant canabilization of the Model 3 and Model Y programs.

I also have concerns about how smooth the production ramp will go after Tesla lost a lot a talent over the last year.

As for autonomy, I don’t think I need to get too much into it. Elon’s track record on it talks for itself.