How did TSLA's Q4 2024 earnings surprise investors?

Tesla's Q4 2024 earnings report disappointed investors due to several factors:

1. **Revenue Shortfall**: Tesla's revenue for the quarter came in at $25.71 billion, which was below the projected $27.26 billion. This marked a 2.1% year-over-year increase, but it was not as robust as expected.
2. **Earnings Per Share (EPS) Miss**: The company reported an EPS of $0.73 for the quarter, which was slightly below the forecasted $0.76. This represented a 3.95% miss, indicating that Tesla's profitability, despite improvements in energy storage, was lower than anticipated.
3. **Automotive Segment Challenges**: Tesla's automotive segment faced significant pressures, with a 8% year-over-year decline in revenue and a 23% drop in operating income. This was primarily due to aggressive pricing strategies and intense competition in the market.
4. **Gross Margin Compression**: Tesla's gross margin decreased to 16.3% in Q4, down 138 basis points year-over-year. This was influenced by reduced vehicle average selling prices, which compressed margins despite cost discipline efforts.
5. **Energy Business Growth**: While Tesla's energy generation and storage revenue surged by 113% year-over-year, reaching $3.1 billion, this growth was not enough to offset the automotive segment's challenges.

Overall, Tesla's Q4 2024 earnings fell short of investor expectations due to lower-than-expected revenue and EPS, combined with challenges in the automotive segment and margin compression. Despite these setbacks, Tesla's strategic focus on energy storage and long-term growth initiatives, such as new model launches and AI infrastructure expansion, may offer hope for future performance.