What’s happening: Shares of Tesla gained in after-hours trading on Wednesday, following the release of the company’s fourth-quarter results.
What happened: The electric vehicle giant reported weaker-than-expected sales and earnings for the latest quarter.
However, Tesla signalled that its vehicle sales will return to growth in 2025, lending support to the stock.
How were the results: The Austin, Texas-based company reported low single-digit growth in revenues for the fourth quarter.
Why it matters: The EV maker has been operating in a tough market, amid stiffening competition from peers, forcing it to lower prices to defend overall sales.
Tesla’s automotive revenues contracted by 8% year-over-year to $19.8 billion in the latest quarter, with lower selling prices causing a negative impact. Gross margins came in at 16.3%, while operating margins was 6.2%.
The company had previously reported its vehicle production and delivery numbers for the fourth quarter at 459,445 and 495,570, respectively.
Although overall deliveries reached a record high during the fourth quarter, its deliveries of 1.79 million vehicles in 2024 were down from 1.81 million in the previous year. This marked the first annual decline in deliveries in Tesla’s history. Management said the vehicle business would return to growth this year.
“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. Product plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025,” the company said in a statement.
How shares responded: Tesla’s shares climbed 4.1% to $405.23 during the extended trading hours on Wednesday, following the release of quarterly results. The stock has lost around 7% over the past month.
What to watch: Investors will continue monitoring production and delivery numbers for the company. Tesla is looking to announce a more affordable model and is set to enter the production stage during the first half of the year. Markets await details regarding the features and cost of the new model.
Context: The GBP/USD forex pair edged higher this morning amid weakness in the US dollar.
Details: Data released this morning showed that UK’s car production fell 27.1% year-over-year to 45,022 units in December. The region’s car production declined for the tenth month in a row, signalling the ongoing shift to electric vehicles and lower demand in major global markets. Over the course of 2024, UK’s total car production tumbled by 13.9% to 779,584 units, hitting the weakest annual output since 1954.
The Bank of England is widely expected to cut its key interest rate by 25 basis points during its meeting next month, while the US Federal Reserve kept rates unchanged at its recent meeting on Wednesday.
Weakness in the US dollar lent support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% to 107.86 this morning.
The GBP/USD forex pair edged higher to 1.2450 this morning, while the EUR/GBP rose slightly to 0.8373. London’s FTSE 100 had risen by 0.28% to close at 8,557.81 on Wednesday.
What to watch: Investors await the release of economic data on consumer credit (1330 UAE Time), M4 money supply (1330 UAE Time) and net lending to individuals (1330 UAE Time) from the UK today.
Net consumer credit in the UK, which rose by £0.88 billion in November, is expected to rise by £0.95 billion in December. The outstanding supply of M4 money in the UK, which was mostly unchanged from the previous month at £3.077 trillion in November, is projected to increase by 0.2% in December. Analysts expect net lending to individuals to rise to £3.6 billion in December, from £3.4 billion in the previous month.
Other Markets: US trading indices closed lower on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.31%, 0.47% and 0.24%, respectively.
The US sent around 90 patriot missiles from Israel via Poland to help Ukraine in its war with Russia. The news sent the RUB/USD pair lower in forex trading this morning.
Philippines’ GDP grew by 5.2% year-over-year in the fourth quarter, in-line with the previous quarter’s reading, lending support to the PHP/USD forex pair.
The Hong Kong Monetary Authority maintained its base rate at 4.75% at its latest meeting, sending the HKD/USD pair lower in forex trading this morning.
Thailand’s car sales contracted by 20.94% year-over-year to 54,016 units in December, compared to a 31.34% decline in the previous month, exerting pressure on the THB/USD forex pair.
Australia’s export prices rose by 3.6% in the fourth quarter, following a 4.3% decline in the previous quarter. The region’s export prices rising for the first time since the fourth quarter of 2023 sent the AUD/USD pair higher in forex trading this morning.
Spain’s inflation rate (1200 UAE Time), Germany’s GDP growth rate (1300 UAE Time), Italy’s GDP growth rate (1300 UAE Time), unemployment rate (1400 UAE Time) and industrial sales (1500 UAE Time), South Africa’s PPI (1330 UAE Time) and interest rate decision (1700 UAE Time), UK’s mortgage approvals (1330 UAE Time) and mortgage lending (1330 UAE Time), Eurozone’s GDP growth rate (1400 UAE Time), unemployment rate (1400 UAE Time), consumer confidence (1400 UAE Time), economic sentiment (1400 UAE Time), consumer inflation expectations (1400 UAE Time), industrial sentiment (1400 UAE Time), selling price expectations (1400 UAE Time), services sentiment (1400 UAE Time) and ECB interest rate decision (1715 UAE Time), Brazil’s IGP-M inflation (1500 UAE Time), Turkey’s MPC meeting summary (1500 UAE Time) and foreign exchange reserves (1530 UAE Time), Canada’s CFIB business barometer (1600 UAE Time) and average weekly earnings (1730 UAE Time), Mexico’s GDP growth rate (1600 UAE Time), Spain’s business confidence (1615 UAE Time), as well as US GDP growth rate (1730 UAE Time), initial jobless claims (1730 UAE Time), continuing jobless claims (1730 UAE Time), core PCE prices (1730 UAE Time), pending home sales (1900 UAE Time) and EIA natural gas stocks change (1930 UAE Time).