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Tesla’s Performance Declines Amidst Market Scrutiny
Tesla’s revenue for 2024 increased by approximately 1% to $97.7 billion, a significant slowdown from 19% growth in 2023. In Q3, the company reported record revenue of $28.1 billion, up 12% year over year, attributed to 497,099 vehicle deliveries, which grew by 7%. However, operating income fell 40% to $1.6 billion, with operating margins dropping from 9.2% in 2023 to about 7.2% in 2024.
Investor Michael Burry labeled Tesla’s stock (NASDAQ: TSLA) as “ridiculously overvalued,” with a market capitalization exceeding $1.4 trillion and a price-to-earnings ratio of 294. This valuation suggests that the market anticipates a return to rapid growth and improved profit margins, which may prove challenging as the company invests heavily in AI and autonomous technologies, impacting near-term cash flow and margins.
Tesla plans to spend about $9 billion in capital expenditures in 2025 to support initiatives such as Cybercab manufacturing and AI infrastructure. In contrast, traditional automakers like Toyota and General Motors have price-to-sales ratios below 1, highlighting the disparity in Tesla’s valuation strategy.
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