Tesla reported earnings of $7.9 billion in net income on $25.2 billion in revenue during the fourth quarter of 2023. The figures represent an increase in revenue, up from $24.3 billion the same time last year.

The company’s profit margins improved slightly but are still down compared to last year’s. The company reported margins of 8.2 percent, up slightly from 7.6 percent the previous quarter but down from last year’s 16 percent.

Tesla used to have historic profit margins, sometimes as much as 20 percent, but a series of price cuts have caused its once-vaunted margins to drop into more earthly territory, worrying investors. 

Also fewer Tesla vehicles qualify for the federal EV tax credit, thanks to strict new rules for the sourcing of battery materials. The performance version of the Model 3, the long-range version of the Model X, and three versions of the Model Y still qualify for the full $7,500 tax credit, which can now be applied at the point of sale.

Tesla is also facing the existential challenge of losing its place as the world’s top producer of electrified vehicles to BYD. The Chinese company said it produced 3.02 million EVs in 2023, as compared to Tesla’s 1.81 million cars. However, BYD’s figures include 1.6 million battery-electric cars and 1.4 million hybrid vehicles — so Tesla can still claim to be the top producer of pure EVs.

Hours before the earnings report was released, Reuters reported that Tesla plans to start production on an all-new electric crossover vehicle in mid-2025. The company has apparently invited suppliers to bid to work on the car and is forecasting producing 10,000 vehicles weekly. Speculation is that this could be Tesla’s long-promised $25,000 vehicle for mass-market consumers.

“We are focused on bringing the next generation platform to market as quickly as we can, with the plan to start production at Gigafactory Texas,” Tesla said in a note to shareholders. “This platform will revolutionize how vehicles are manufactured.”

The company also predicted that its growth rate in 2024 “may be notably lower” than it was in 2023 as it works to launch the next-gen vehicle.

But Musk has been making investors nervous by making statements about spinning off Tesla’s artificial intelligence work into a separate company if he is unable to increase the size of his ownership. Such a move would drastically undercut the company’s value, which is largely based on futuristic vibes.