Tesla’s Strategic Shift and Q4 Performance
Tesla (NASDAQ: TSLA) has announced a significant pivot away from its core electric vehicle production, revealing plans to cease manufacturing its luxury Model S and X vehicles. Instead, the company will convert one of its factories to produce its Optimus humanoid robots, with a projected output of 1 million robots annually. Tesla also plans to reveal the third generation of Optimus this quarter, aimed for mass production.
In its Q4 earnings report, Tesla experienced a 16% drop in automobile deliveries, marking the third decline in four quarters, with total deliveries down 3% year over year to $24.9 billion. While the company’s auto revenue decreased by 11% to $17.7 billion, there was a notable 38% increase in active Full-Self Driving subscriptions, reaching 1.1 million users. The overall revenue decline was somewhat mitigated by a 25% increase in energy generation and storage revenue to $3.8 billion.
CEO Elon Musk indicated that production of robotaxis without steering wheels will start in April, with plans to implement them in multiple major cities by the end of the year. Tesla is expected to invest over $20 billion in capital expenditures this year to support these initiatives, despite experiencing a 21% decrease in operating cash flow in Q4 to $3.8 billion.
