Tesla’s stock rose more than 2% after CEO Elon Musk promised to launch long-awaited, cheaper models in the first half of 2025 and begin testing an autonomous transportation service in June.
According to Reuters, the promises helped investors overlook a weak fourth quarter in which margins shrank and revenues fell below expectations due to slow model updates and increased competition.
Doubts about Tesla’s automotive business grew after it ended 2024 with its first annual decline in deliveries, despite cheaper financing options and price cuts that undermined margins.
Growth Projections
Tesla stated that it expected its vehicle business to grow again this year, but it did not repeat Musk’s late last-year prediction that sales would grow between 20% and 30% in 2025.
“The results are emblematic of a company transitioning from a pure-play automotive business to a highly diversified one in AI and robotics,” said analysts at Morgan Stanley.
Tesla’s stock has recently risen with hopes that U.S. President Donald Trump, whose electoral campaign Musk had supported with around a quarter of a trillion dollars in donations, would provide a clearer regulatory path for its robotaxis.
Musk said that Tesla would begin unsupervised testing of its autonomous transportation service in Austin, Texas. He did not provide details on how the service would work or its affordable vehicle plans, including pricing.
Tesla would add approximately $28 billion to its market value if profits hold steady. The stock ended last year with a 62.5% gain and trades at 118 times its 12-month earnings estimates, compared to Ford and GM.
