Hey everybody Rob Mauer here, welcome back to Tesla. I guess formerly daily. Appreciate you guys being here. Obviously today we're going to be talking about Tesla's earnings report, which will be coming up here in the next 15 minutes or so. We'll take a look at a little bit of news before that and also just run through quick some of my expectations as we head into the call.
Nice to be back here for Tesla earnings. If you are joining this after the live stream, of course, check the timestamps below. We can fast forward to when the actual episode comes out. Alright, it's been a while. See if I can still remember how to do this stuff.
But as we can see here, Tesla on the day today looks like it's going to close down slightly, underperforming the NASDAQ pretty significantly throughout the day, closing the gap a little bit here as we head into close. It's been a tough stretch here for Tesla over the last little bit. So hopefully we'll see after earnings today, not the earnings have been positive events before the stock as of late, but you never know when things are going to change.
Alright, one of the big pieces of news, we'll just touch on quickly and then we'll hop over to Excel, and then we'll come back and kind of refresh as we do and wait for the earnings report.
But one of the big pieces of news yesterday, or I guess maybe late or early in the morning today, Roy Ders reported a little bit of news possibly on the next generation vehicle.
但昨天的一个重要新闻之一,或者或许是今天凌晨时分,罗伊·德斯报道了一些关于可能的下一代车辆的新闻。
So they said Tesla has told suppliers that it wants to start production of a new mass market electric vehicle, codenamed Redwood, in mid 2025, according to four people familiar with the matter, two of them describing the model as a compact crossover. So I don't think any of that would be too surprising in terms of the timeline, maybe around what we would expect. They gave a little bit more information on it saying production would begin in June 2025. Now that could be an aspirational timeline that could be sort of, you know, trial production and things like that. Obviously, we've seen the Cybertruck being sort of in production for a while before we have eventually end up with customer deliveries and things like that. So we'll have to wait and see for those types of things. But they do say that that is the targeted timeline, at least for suppliers at this point in time.
They say Tesla sent request for quotes or invitation for bids for the Redwood model suppliers last year and forecast weekly production volume of 10,000 vehicles. So 10,000 vehicles per week, obviously, that would be a little bit lower than what we might expect. And certainly, it seems like an initial production target. Let me just make sure I'm not mistaking my math here, but that's only 500,000 vehicles per year. So obviously, we'd expect a next-generation vehicle platform to do significantly more than that over time. But initially, you got to start somewhere, of course.
And then they did say one other detail in here. They said that the next-generation architecture, which could have two or more models on it, or I guess will include two or more models, which we've kind of heard Elana lead to before with a robot taxi and a non-robot taxi. They're internally calling this NV9X. So I guess they're calling that the. I'm not clear on the distinction between Redwood and NV9X. Maybe one is the model, one is the platform. But for whatever that's worth, if anyone can decode that, certainly take a shot at it. Certainly won't be the model name, or at least I want it anticipated to be. Of course, it kind of reminds me of the Toyota BZ4X, I believe, is the nomenclature there. But exciting to see some reporting on the next-generation vehicle. And hopefully, as we move into next year, we'll start to hear a little bit more into this year, 2024. We'll start to hear a little bit more about it. I would expect the Tesla is trying to keep it as under wraps as possible before we just did not put any pressure in terms of Osborneing on the current product line with the Model 3 and the Model Y. So we'll see, but definitely exciting to hear a little bit more of that reporting.
Let's see. I do want to go through some earnings expectations. The other thing that people have been talking a lot about is Elon Musk's stock compensation, which I know is probably more discussed heavily last week. We should probably spend a little bit more time, I guess, talking about that. Maybe we do that after earnings. But in general, I'm in favor of a stock-based compensation plan, similar infrastructure to the one before. We could talk a lot about maybe some changes that should be made and what the actual target should be and what the compensation level should be. But I do think having that incentive package is good for motivation for Elon and also for recruiting purposes.
I think when that compensation plan existed, it was a big tell to both investors and to possible employees. Sorry, I keep hitting my microphone. Both to investors and possible employees of Tesla's aspirations and vision for where things could end up someday. So if there's a new compensation plan that has similarly aggressive targets for the future, I think that might be inspiring to current employees, future employees, and certainly the investor set as well, beyond just the implications for the actual motivation and things like that for Elon. So I would be in favor of something that provides those things. Of course, if it's structured in the right way, and again, that's a lot of areas for debate upon that. But I just wanted to share my quick thoughts on that as well.
Let's see. Somebody saying it's out. The trolling is starting already. Obviously, it's not out yet. Market's not close. Let's hop over to Excel. I know I didn't do a forecast episode this time, but we can just quickly take a look at some things. If I get this right, I was quickly trying to format this a bit before I got started here. It's not quite as good as usual, but hopefully everyone can see everything there. Let me know if the audio levels are OK here. Thank you for the Super Chat people. I appreciate that.
OK, so I've got my forecast over here. I didn't spend as much time as I normally would on my forecast. As usual, I do my forecast before I look at any other forecast from anybody else or from the analyst consensus and things like that. Ultimately, did end up in a pretty similar spot to where the consensus is if we just skipped at the bottom line. I'm actually only a penny off on earnings per share. Obviously, there's a lot more interesting things before we get to that bottom line, but that's what people like to look at and compare.
So I'm at 72 cents non gap earnings per share, up slightly quarter of a quarter, but of course down to last year, which I think is probably expected with margin rates coming down or with margin levels coming down. Gap earnings per share, 58 cents. That'd be versus 59 cents analyst consensus. So across the board, there's some similarities, some differences. The biggest difference is probably automotive revenue. I'm a little bit higher. You can see where I have average selling prices coming in pretty similar to where they were last quarter. I do have a lot of fluctuations between model lines and different regions, but ultimately it netted out the same. You've got some increase from Highland. You've got probably declines in just general ASP across the board from older inventory model threes and things like that, which were again heavily discounted towards the end of the quarter. We did have price cuts at the beginning of the quarter, things like that. There's various different factors influencing that, but ultimately netting out lower as my expectation. One of the big things is we have a higher mix of SNX this quarter by 7,000 more vehicles than we did last quarter. That helps a bit as well. For model three and model Y though, I have a more significant decline here, even with the benefit of the Highland in some regions.
Energy and service and other services and other were pretty close in terms of our expectations there. I'm a little bit higher in terms of my expectation for energy storage deployed. It's really just a guess. I don't think we have any great insight on that yet. Thank you, Instant. I appreciate that a lot.
And then when we go further down, I'm actually expecting lower gross margins. It looks like again, this isn't broken out in the analyst consensus, but I have higher revenue, but lower total gross profit. So my margin expectations are pretty significantly lower than analyst consensus yielding a couple hundred million dollars less. Some of that could be regulatory credits too. I have that declining quarter of a quarter and year over year because we did have a pretty big quarter last quarter.
So ultimately, I'm at 15.7 automotive gross margin X credits, ignore that error. I guess we got a lot of them, but just inconsistent formula. Anyway, 15.7% gross margins versus 16.3 last quarter. So some decline, some of that is going to be attributed to cyber truck, which is probably going to move some costs from R&D into automotive gross margin X credits this time around as production has started and deliveries have started as well.
And then for operating expenses, I have those slightly down quarter over quarter, mostly due to R&D, just because again, some of those costs probably shift into the gross margin bucket this time around. Ultimately, I'm at a 7.6 operating margin, again, a little bit lower than consensus, but because my revenue number is higher than I'm netting out at the bottom pretty similarly.
All right, let's make sure I didn't miss anything here. Let's look back to the browser. And we'll see what happens. Usually Tesla's been getting this out pretty quick, so hopefully that'll be the case this time as well. We'll just have that refreshing. Maybe pull this up. This is last quarters. Don't worry. But I'll just change the URL there and see. Update three. Let's see. This is Q2. Interesting. Different links here. All right, well, we'll see if that works at some point. And then I know last time around I actually had the hard refresh that I think refreshes the cache. Now I'm forgetting the hotkey for that. If anyone else the hotkey for that on Macs, let me know. Try to keep an eye on the chat. Oftentimes our first indicator ends up being here in the after hours trading. If there is a big movement, sometimes though that can happen and then it didn't actually come out yet. So we'll keep an eye on that. But for the moment, I'm just going to kind of look through chats here. I do see some super chats. So do you want to thank some people here? Bruce Winston, Tom, Frank, Camogee with Bonnie, Jasper, Christopher, Avatrod. 1977, Sif Lord. Thank you guys. I appreciate it. It's going to be back. It's fun to be doing this. I feel a little bit re-energized.
好的,让我们确保我没有漏掉任何东西。让我们回到浏览器看看会发生什么。通常,特斯拉很快就会把这个发布出来,所以希望这次也是这样。我们只需要刷新一下。也许把这个打开。这是上一季度的。不用担心。但是我只是在改变URL然后看看。更新三。让我们看看。这是Q2。有趣。这里的链接不一样。好吧,我们会看看是否在某个时候能行。然后我知道上一次我实际上要硬刷新,我记得这样可以刷新缓存。现在我忘记了这个快捷键。如果有人知道在Mac上的快捷键,请告诉我。我会留意聊天室的。通常情况下,我们的第一个指标在于盘后交易中。如果有大的波动,有时候它意味着已经发布了。所以我们会密切关注。但目前,我只是在这里翻阅一下聊天室。我看到了一些超级聊天。所以我想感谢一些人。Bruce Winston, Tom, Frank, Camogee with Bonnie, Jasper, Christopher, Avatrod. 1977, Sif Lord. 谢谢大家。我很感激。回来了很有趣。我感到有点恢复了活力。
All right. After hours is up, that's hopefully a good sign. Yeah, that's reading mode. Command shift plus R. That gives me reading mode. I'm in Safari, so I think it's different Safari versus Chrome. See if this worked. All right. My URL trick worked. All right.
So here we go. Q4 earnings. Let's see what we got. I'm not as familiar with my own projections this time around, but we'll just start reading. So we'll hit the highlights.
8.9 billion gap operating income in 2023, 2.1 billion in Q4.
I'm just going to quickly take a glance at what I had. I had operating income at 2, 2 flat. So it looks like operating income ahead of my expectations, which is good. 2.5 billion dollars in gap, non-gap net income.
Let's see what I had. I actually had 2.5 on the dot, not in gap net income. Literally 0.0. It's probably different than that. But it looks like that's roughly in line with what I expected.
I just want to glance at earnings per share then. What's going on there? Something happened. Something happened there. Now we're down. So let's see. There must be some special item here.
That's gap net income is crazy. That's not an annual figure. There's some special item. We'll take a look at that. That probably caused algorithms to react. Now we're seeing a different reaction after perhaps digested. We'll see.
Next line. There we go.
One-time non-cash tax benefit of $5.9 billion recorded in Q4 for the release of valuation allowance on certain deferred tax assets.
You guys remember, we've been actually been talking about that for, I don't know, 18 months, two years or something like that. That this may be coming and then people kind of just forgot about it because it never really happened.
But that was actually a line item in this document at one point. And then, oh, you can't see, but I switched to Excel. We actually had it in that forecast summary for a long time and then it just never happened. So we dropped it out. But that is driving the significant increase here in gap net income.
Now non-gap net income, of course, is going to be a better measure of where things are at. This is just something that is going to be backed out from analysts. It will actually affect the price to earnings ratio. So the price to earnings ratio is going to be artificially boosted from this. Whether it's artificially or not, you can argue that. It's a long big period of deferred things sitting in one period though. That's why you try to back those things out.
But with that, that's going to affect the price to earnings, which is based on the gap earnings per share. So we'll talk more about that. But let's carry through here.
Right cash, operating cash flow, $13.3 billion free cash flow in Q4, or sorry, free cash flow. I can just bump my camera there.
Operating cash flow, free cash flow, $4.4 billion in 2023, $2.1 billion of that in Q4.
$3 billion increase in our cash and investments in Q4 to $29.4 billion, which is awesome.
Model Y became the best selling vehicle in the world. Looks like they're foot noting that this is Tesla's estimate based on preliminary data. So we've talked a bit about that. We've talked about how we weren't sure if that was official yet. Tesla here is saying that that is their estimate. So exciting to see that.
Energy storage deployment of 14.7 gigawatt hours in 2023, 125% growth. So a lot of annual figures here. We'll have to see what the quarter shakes out to be.
Model Y成为全球最畅销的车辆。看起来他们在这里注明这是特斯拉根据初步数据估算的。我们已经谈论过这个话题了。我们谈过我们不确定这是否已经官方发布。特斯拉在这里表示这是他们的估计。看到这个真是令人兴奋。
2023年储能部署量为14.7千兆瓦时,增长率为125%。所以这里有很多年度数字。我们得看看这个季度的情况如何。
All right.
好的。
Let's read through the summary. So we delivered over 1.2 million model-wise. Usually we don't see that breakdown. Obviously, we can estimate it, but it's nice to have a little bit more of a granular look at that model split, making it the best selling vehicle of any kind globally.
Free cash flow remains strong, $4.4 billion, even as we focused on future growth projects with our highest capital expenditures and R&D expenses in company history.
Energy storage deployments. We talked about more than double compared to the previous year. While energy generation and storage business profits nearly quadrupled in 2023, economies of scale plus some benefit from the inflation reduction act. Credits that are there as well.
Sales profit of our services and other business increased from negative $500 million loss in 2019 to a $500 million profit in 2023.
我们的服务和其他业务的销售利润从2019年的负5亿美元亏损增加到2023年的5亿美元利润。
Cost of goods sold per vehicle declined sequentially in Q4. It's good to see. Our team remains focused on growing our output, investing in our future growth and finding additional cost efficiencies in 2024.
In late December, started growing out version 12 of FSD beta. Trained on data from the fleet of over a million vehicles, system uses ad to influence vehicle controls instead of hard coding every driving behavior. V12 marks a new era in the path to full autonomy. We are focused on bringing the next generation platform to market as quickly as we can with the focus to start production at Kicafactory, Texas. This platform will revolutionize how vehicles are manufactured. So interesting to see that actually a little bit more information.
Before we go through the financials, I want to scroll down and see what Tesla did for Outlook here because with this being the annual update, presumably we've got some sort of indication of what next year might look like or this year might look like. They say our company is currently between two major growth waves. First one began with the global expansion of the Model 3 slash Y platform and the next one we believe will be initiated by the global expansion of the next generation vehicle platform. In 2024, our vehicle volume growth rate may be notably lower than growth rate achieved in 2023 as our teams work on the launch of the next generation vehicle at Kicafactory, Texas. In 2024, the growth rate of deployments and revenue in our energy storage business should outpace the automotive business. So I'm not surprised here at all. Tesla has always given vague guidance on short periods and short being a year in terms of Tesla relatively. So I'm not surprised that they didn't give us anything specific. I'm actually pretty happy with how they've worded this, but not sure the market will agree. My expectations for 2024, I think we have as we've talked about before, are not anything high. Hopefully articulated that this has kind of been my sense now for a while that we're reaching the plateau of Model 3 and Model Y and there's probably going to be a little bit of a waiting period, obviously, before we get to that next generation vehicle. And this is not any different than how Tesla has been historically. There's been periods of time where the Model S plateaued, then the Model S and X plateaued, then the Model 3 kind of plateaued, and the Model Y. And now we're kind of at the tail end of that. Obviously we'll have Cybertruck that's going to be lower volume compared to how big Tesla's business has gotten today. But really the next generation vehicle is going to be what drives Tesla from a couple million a year to a number significantly higher than that. So whether the Model 3 and Y top out at 2 million, 2 and 1 half million, 3 million, it matters a bit and it matters to the stock and how people trade this stock. But ultimately what matters longer term is the next generation vehicle, FSD, and everything that Tesla is doing outside of those businesses. So it makes sense on that. Cash, sufficient liquidity, profits, continue to expect, while we continue to execute on innovations to reduce the cost of manufacturing and operations over time we expect our hardware-related profits to be accompanied by an acceleration of AI software and fleet-based profits. It's a pretty similar to what we've heard before. And then for product, Cybertruck production and deliveries will ramp throughout this year. In addition, we continue to make progress on our next generation platform.
在我们查看财务数据之前,我想先往下滚动一下,看看特斯拉在展望方面做了些什么,因为作为年度更新,我们应该有一些对明年或者今年前景的暗示。他们说我们公司目前正处于两次主要增长浪潮之间。第一次浪潮始于Model 3/Y平台的全球扩张,我们相信下一次将由下一代车辆平台的全球扩张引发。到2024年,由于我们的团队正在凯卡工厂(位于得克萨斯州)的下一代车辆的发布上进行工作,我们的车辆销售量增长率可能明显低于2023年的增长率。到2024年,我们的能源存储业务的部署和收入增长率应该会超过汽车业务。所以,我对此一点也不惊讶。特斯拉一直在短期内给出模糊的指导,而短期对于特斯拉而言是一年,所以我并不惊讶他们没有给出具体的信息。我对他们的措辞非常满意,但不确定市场是否会同意。我对2024年的期望并不高,我们之前已经谈过了。显然,在我们达到下一代车辆之前,Model 3和Model Y已经达到了高原期,之后可能会有一段等待期。这和特斯拉历史上的情况没有任何不同。Model S曾经达到高原期,然后是 Model S和X,再然后是Model 3和Model Y。现在我们处于这个过程的尾端。显然,我们将有Cybertruck,但它的产量会比起今天这个规模庞大的特斯拉业务来说要低一些。而真正推动特斯拉从每年几百万辆增长到更高数字的,将是下一代车辆。所以无论Model 3和Y最终达到200万辆、250万辆还是300万辆,它对于股票以及人们如何交易这只股票来说,都有一定影响。但从长期来看,更重要的是下一代车辆、全自动驾驶以及特斯拉在这些业务之外所做的一切。所以在这方面是有道理的。现金充足、利润持续预期,我们在不断推出创新以降低生产和运营成本的同时,预计我们与硬件相关的利润将伴随着人工智能软件和基于车队的利润的加速增长。这和我们之前听到的差不多。至于产品方面,Cybertruck的生产和交付将在今年逐渐加速。此外,我们还在下一代平台上取得了进展。
All right, so nothing too crazy in that outlook. I think mostly what I would have expected on that page. We'll skip to the photos and charts. We'll go back to the other things too, but just want to see if there's anything crazy in here.
We've got the highland. Fremont factory produced nearly 560,000 vehicles in 2023 in all-time record. That is nice. Also gives us a little bit more granular data that we can back out to get more data on other factories too.
Someone just gave me a super chat and said, why do you sound like text to speech? I don't know. Some Cybertruck stuff, Cybertruck production line, Megapack production line, Tesla wraps. Looking good. And then some of the metrics.
All right, so let's go back and get to where we were. Still laugh at that comment. I have been called monotone from time to time.
好的,那么让我们回到之前的话题吧。依然笑着回想起那个评论。有时候,我会被称为单调。
All right, so let's see. We're almost to the point where we start filling in some spreadsheets here. And you guys can probably hear this, irons.
好的,那么让我们来看看。我们快要开始在这里填写一些电子表格了。你们可能可以听到这个声音,熨斗声。
Total automotive revenues. Those are a bit below I think what I had. We'll see if that comes from regulatory credits at all. Just wanted to try to take a glance at that. So those are annual numbers.
We'll go back here. Yeah, so we'll read through the rest of this. I do want to see regulatory credits quick though.
我们会回到这里。是的,所以我们会读完剩下的内容。不过,我想快速看一下监管信用。
All right, regulatory credits, 433. So actually a little bit higher than what I expected, not too materially. But that means ASPs are going to be a little bit lower than what I expected or what I would have hoped.
And then yeah, we'll have to see how this other stuff kind of affects. We'll have to see where this one time line item comes in and how that affects some of the other lines, but we'll figure that out.
But for now, let's keep reading through here. So financial summary, total revenue grew 3% year over year and Q4. The revenue was impacted by the following items. Positive growth in vehicle deliveries, growth in other parts of the business. Effects impacted about $100 million while reduced vehicle average selling price offset that, excluding foreign exchange impact.
Including unfavorable mix, unfavorable impact of mix, and lower FSD revenue recognition year over year since that was wide re. Widely released last year. Operating income decreased year over year to $2.1 billion in Q4, 8.2% operating margin. Year over year operating income was primarily impacted by the following items.
Reduced vehicle ASP due to pricing and mixed, increased operating expenses partly driven by AI and other R&D projects, lower FSD revenue recognition year over year due to FSD beta wide release, cost of cyber truck production ramp, and increasing it was lower cost per vehicle, including lower raw material costs, which makes sense with some of the inflationary impacts coming down.
Logistics costs and IRA credit benefit, growth in vehicle deliveries, gross profit and energy storage, and generation increasing. While it did not impact operating income, they did record the one-time cash benefit that we talked about. Non-cash tax benefit that we talked about.
Over end cash, so we've talked about that increased 3 billion to 2.9 billion. I thought the cash was a little bit lower. Maybe I'm just not remembering that correctly, but I wonder if that tax thing allowed them to release some cash into the balance sheet. Someone better versed in accounting might be able to help us with that at some point.
By production deliveries we know, leasing we roughly knew, days of inventory we roughly knew, we had said it was 16, 15, obviously within the margin of decimal errors.
Solar deployed, so not too surprising. Unfortunately we see that business continuing to decline sequentially. There's some seasonality effects, but historically Q4s haven't really been much worse than Q3, at least for the few that I looked at when I was making my forecast. It's not much lower than I expected, but unfortunately we're not seeing that business grow alongside the rest of the energy business.
Although there was a little bit of a sequential decline here in energy storage deployed at 3.2 gigawatt hours from almost four last quarter. Locations and superchargers of course continuing to increase. There's just some annual figures and we can see the growth in energy storage.
I think pilot production for the Cybertruck is the only thing changing, moving to production. And then the next generation platform in Roadster. Still on that roadmap, um, in development.
All right, so let's make sure we're on the right earnings. Not reading the wrong thing here. Close that out. Back Q4.
好的,那么让我们确保我们对利润有正确的理解。不要读错了。关闭那个。回到第四季度。
So vehicle capacity after our scheduled global factory shutdown in Q3, our global production reached a record annualized run rate of nearly two million vehicles in Q4. The refreshed Model 3 was significantly quieter cabin, ventilated seats, a screen for rear seats, longer range and many other improvements is now available globally.
For US, before Tesla purchased the Fremont factory, the record output of the previous owners, nearly 530,000 vehicles made in a single year. Tesla produced 500, nearly 560,000 vehicles thanks to our roughly 20,000 Fremont-based employees at Gigafactory, Texas. We began production of the Cybertruck and delivered the first units to customers. We expect the ramp of Cybertruck to be of longer than the other models given its manufacturing complexity for China, Shanghai resumed normal production and Q4 normal rate of production in Q4 rebounding from the scheduled down time in Q3 production of the updated model 3 ramp to full speed in less than two months. Even the interim period was quite impressive. In Berlin, Model Y production in Berlin continued to grow in Q4, so that's nice. Achieving both a record weekly production rate and a sequential increase in total production volume for the 7th consecutive quarter. That's good, and also gives us a little bit more context for some of our historical figures as well. Market share by region. Obviously a lot of growth there in all regions. Maybe starting to plateau a little bit with some of the things we talked about with the current product lineup.
Core technology in Q4, we released our latest FSD beta software to select Tesla employees and more recently to customers. V12 utilizes end-to-end training enhancing the driving experience. We also introduced the second generation of the Optimus robot, which uses Tesla-designed actuators and sensors and improved AI capabilities. Both FSD beta and Optimus are trained with similar technology pillars, real-world data, neural net training, and cutting-edge hardware and software. Then we can see cumulative miles with FSD beta continues to increase. Now we're at about 750 million miles driven there.
Vehicle and other software. We delivered the Cybertruck with an all-new user interface and new communication bus, either loop, that efficiently moves data while significantly reducing wiring. As part of our holiday update, when parking, Tesla vehicles without ultrasonic sensors display a high-fidelity 3D rendering of the vehicle's surroundings, including nearby barriers vehicle. Nearby barriers vehicles and painted markings. Wireless Bluetooth headphones can also now be paired with the rear screen when watching shows or playing games, fleet API enables third-party solutions.
Cogs decline, you can see, obviously note where the access is here, but nice to see. It's a very significant decline in the fourth quarter. Since ASPs were quite a bit lower, but margins were actually a little bit better, it's really nice to see that that's obviously being driven here by cost of goods sold reductions. So we'll take a look at how that comes to be when we work through the numbers.
Battery powertrain and manufacturing. Cost of goods sold per vehicle declined sequentially to slightly above $36,000, even as we approach the natural limit of cost down of our existing vehicle lineup. Our team continues to focus on further cost reductions across all points of production from raw materials to final delivery. Also note, this probably includes some impact of Cybertruck, impact of transitioning to highlands, both probably in China and in Fremont, sounds like that started a little bit early. Some of those things will impact these numbers on the cost side as well.
Energy storage. Nice looking graph there. We talked about that. I think this is probably all stuff we talked about. Tesla just noting that there's volatility due to logistics and I'm sure recognition as well, which we'll take a look at when we get the 10k. Some of those recognition factors. But they continue to ramp towards 40 gigawatt hours in California. Solar deployments declined. Downward pressure on solar demand continued in Q4 as interest rates have remained high. So I should have mentioned that earlier, but yeah, obviously interest rates super impactful in the solar business. Profitability in the quarter was negatively impacted by lower deployments and seasonal weakness in solar energy generation. So there's less sun generating less solar energy. Tesla's going to make less profit from some of the legacy business structure with solar city and things like that.
Services and other the business continue to grow alongside our fleet in 2023. Yeah, so all stuff we've talked about. As our fleet continues to expand in the coming years, there's an opportunity for fleet-related services to become a more meaningful driver of profit generation. There you can see how that's evolved over time. Man, when we started, you know, back in these years, we were talking about how this would eventually change and how it was so impactful on the current business. And here we are. Now it's changed.
All right, outlook we talked about photos and charts we talked about and this should all just be the rest of the finance roles. All right, so let's just take a quick check on the stock and then we'll hop over and start filling in some of these numbers. Looks like we're down about 3% right now. I know not what anybody wants to see, but I'm not seeing anything incredibly unexpected here. Again, maybe there was some hope that Tesla would be more aggressive with guidance. I don't think that would really be based in too much of the current actual business, though, because, you know, we're seeing Tesla doing pricing reductions, discounting and things like that. That's not a strong indicator that they're going to try to continue to aggressively grow production and things like that throughout this year. So shouldn't be terribly surprising.
I'm going to take a quick break here and get a drink. All right. Time for everybody's favorite part. Before everyone, if hopefully no one tunes out while I'm filling out the spreadsheet and we'll talk about those things, but for those that maybe do, we are going to do the earnings call, the live blog, same thing. The link for that will be in the description. So listen to call together, I'll type up notes and then we'll do a quick recap and things like that after the call. So make sure you follow us over to that. That call will be in about an hour from now.
Okay, I'm going to flip to Excel and then we're going to fill out the sheet and then we're going to see how it compares to consensus and my own expectations. And if I say that Tesla missed something, I'm sorry, it's just the vernacular of describing the situation. It doesn't mean that Tesla sucks or anything like that. It just means that my expectations were off or analyst expectations were off. But of course, expectations are what drive stock prices. So it is still important to an extent, of course, and it's just one quarter.
All right. Let's see. What do we start here? I'll flip back and forth. I know it'll keep you guys on Excel, but for deliveries, I think we can just copy and paste that over and then energy storage. Now we're around 3.2 there, but let's get the exact number. Again, bear with me. I know that this part is sometimes a little bit tedious to get through as we fill in a spreadsheet together. And it's been a minute. So let's see. I'm seeing the total financials. I'm trying to look for the actual number. There we go. All right. 3202. And this should be 41. Yep. Automotive sales. Let's see. This one's a little bit more complicated because they've got both annual and quarterly figures. So I just want to make sure that I'm getting everything right. Let's go typo. And regulatory credits are going to be somewhere in the four range, 433, I believe. I'm going to just happen to see leasing revenue in here. So I'm going to fill that in so that we can get some numbers later for ASP and average costs to get sold. And we'll just put the costs in there too while we're at it. Yeah. We'll come back to that last part.
All right. Energy revenue was. And then once we get these all in there, I can go through and talk about them, of course. Energy storage and generation was 1438. Obviously, a decline quarter recorder with the declining energy storage deployments as well as generation. And the costs were 1,124. So this stuff's going to be off for a second, but we'll be fixed. Just making sure that I have this correctly. Think. Oh, making sure I'm looking at the right quarter here. All right. All right. Total sales, though, should all be correct now. It's actually under it. Okay. So this is going to be like that. And then automotive costs, 17498. And hopefully these things are correct now. So total gross profit, 448 is correct. Great. So I'm tempted to talk about margins here, but as you can see, actually quite a bit stronger improvements are stronger gross margins than I expected, stronger than last quarter as well with the costs, which we'll talk, which we'll take a look at in a minute, coming down so significantly. So that's actually really nice to see, even though we're a bit lower on revenues than what I expected.
All right. Research and development costs were 1094. So a little bit of a decline quarter of a quarter. I was a little bit low, but pretty close. SG&A costs, just selling general and administrative, it's 1280. So operating expenses, pretty close to what I had in there. Yeah, 2374. And 8.2% operating margin. I just want to make sure that that matches what Tesla said. I'm 99% sure that it did. And it does.
All right, EBITDA earnings before interest taxes, depreciation, amortization, 3953. Non-gap net income, which is the real important number this time. So super close. Stock based comp is 484. So also pretty close. So our actual net income, gap net income, we're going to set aside the deferred tax allowance right now. It would have been right around $2 billion, you know, within $11 million of what I expected. So presumably we would have been, you know, right there. Let's see what our non-gap EPS is. Yeah, non-gap, I think, was up. Shoot. Second. I think we're at 71 cents here. Okay. Yeah, so 71 cents. So happy with that. And this is probably just going to be 0.57 if you exclude, of course, the deferred tax, which is actually going to be 227. So we'll just throw that in there a little bit.
All right. So free cash flow. See what that was. I think it was pretty good. Yeah, almost 2.1 billion. So that was Tesla's best free cash flow in the last 15 months, which is nice to see. Obviously, that's going to be aided by the lower spread between deliveries and production. Usually, we've had production outpacing deliveries with inventory growing. This time we had, I believe, the opposite just by a few thousand vehicles, but that obviously helps free cash flow. Maybe not obviously, but that helps free cash flow.
Okay. So let's just see here what the actual drawing 12 months earnings per share is going to be. It's going to be 431 is what it's going to come out to. So Tesla at 200. The price to earnings is going to show us 46. So that's going to look nice, nicer than the 70 or something that we're at right now. In reality, we should be looking at, you know, 261 is more the actual number. And you could throw some of the deferred tax in there that wasn't getting recognized in Tesla's entire history and break that up quarter over quarter and add a little bit to this. But for now, we'll just factor that out. We'd be at about 77 times earnings over the last 12 months at a $200 share price. Assuming that that is also correct, which should be or within a penny. Okay.
All right. Let's get our ASP numbers in there. Then we'll have them all. So I think we just need one more number here, the least delivery number, which I know is 1000 something. And let's make sure. Well, it's obviously not 400,000. That seems more correct. Wonder what my issue was there. All right. Well, we'll double check that, but this should be correct. And I know from Tesla's little chart that it was those are together. I know from Tesla's chart that that was the case. The 15% decline quarter over quarter. Sorry, that's your year. Okay. I was going to say that's pretty significant. About a $900 decline in average selling price quarter over quarter. I'd expect it about $100. So of course, this is coming in quite a bit lower. It's tough to say, tough to forecast with not understanding or not having visibility into the mix of new orders versus inventory orders that are going to be discounted. As of course, we saw more of that was towards the end of the quarter, too. So we don't know how much of those, you know, what Tesla's delivery mix by month is, we can guess at it. And then there might be some discounting of, you know, prior orders when price changes happen and things like that, all tough factors to forecast. Then you have regional mix on top of that, model three and model Y mix. That's an X mix, all these things. But those are some of the things that drive this and then for an exchange and a lot of things. But ultimately seeing that decline about $900 quarter, almost $1,000 basically, but costs declining by about $1,200 it looks like here. So that's really nice to see the cost of goods sold declining faster than average selling price, which helped boost the margins from last quarter, not in the total, total line, but more importantly on the automotive gross margin X credits line, which I think has always been one of the first places we've looked at right in terms of just monitoring the health of the business.
So, I would say for most people, they're going to be looking at this line, ASP excluding regulatory credits, automotive gross margin excluding regulatory credits. Those are really two ways to monitor the demand and the health of the business as Tesla, you know, reports these earnings.
So on one hand, you've got the declining average selling price probably lower than even analysts expected. I did have higher automotive revenue than they had forecast. So it's going to be closer to what they had expected in terms of that. But then margins coming in hopefully a little bit higher. You can see the total gross margin line a little bit lower, but I would imagine that that's not being driven a little bit lower than analyst consensus.
But I would imagine that's probably being driven more by the lower margins and energy and service and other over quarter over quarter versus being driven by a difference in automotive gross margin. So I would bet that this was ahead of what consensus would have been. I think pretty happy with the margin number. Pretty happy with the cost of goods sold decline. And again, that's going to still include some things like Cybertruck 4680s. Those have been a negative influencing factor on cost of goods sold for a long time. As those ramp up, that's going to be less of a negative impact. Same thing with Cybertruck. Cybertruck will help average selling price, of course, potentially significantly once it is much higher volume. So there's some things that I think are good there in those lines with this report.
Regulatory credit's not too different. Energy sales, so that was really driven by the, obviously, the lower than expected deployments. But again, as we've talked about many times, those are going to be volatile. Some of those, some of that has to do with just when projects are commissioned, when they're recognized, things like that. So not terribly important, more a better way to look at it would be to look at just trailing 12 months and how that number changes over time.
And then service and other. So I might have put the wrong. Did we have the exact same revenue figure here? Let me just double check this. Make sure I wasn't mixed up at some point, which does happen on occasion. All right. Hmm, interesting. Exact same revenue, Q3 and Q4. So these are actually accurate. Which makes sense because we double check the actual figure for the total. But anyway, not seeing kind of the growth that we had seen there over the last three quarters now, basically identical revenue. And we're starting to see a little bit of a decline. I think this is probably due to the used vehicle market. I'd actually expected lower margins in this business. And this was one of the biggest misses in my forecast. One of the earlier quarters this year, maybe Q2 or Q3.
Take a look here. One of these points I'd expected to decline because I assumed that with the prices coming down on new vehicles that for used vehicles, Tesla would probably be making a little bit less margin there, which was driving a lot of this positive gross margin. That didn't really happen. Maybe it's now starting to happen a little bit more delayed than what I had anticipated or there could be other factors too. And in the 10Q or in the 10K, we'll learn a little bit more about that, most likely as well. But both of those things being below, obviously my expectations, probably analyst expectations as well means this total gross margin is probably better.
You know, better if you. I think analysts would prefer that automotive gross margins are higher and energy and service and others are lower if you're going to end up with the same number just because this is probably going to be a better indicator of the health of the business. And these two lines are subject to more fluctuation and smaller, so they can change more as the business develops over time. So hopefully that can make sense.
And then operating costs, I mean, not too much to talk about here, pretty much 1% different than my expectations, so pretty much in line. And then operating margin. So of course the difference here. From my expectation would be the higher automotive gross margins, which is nice. Offset a bit by the lower margins and the lower margins in the other business. And then really that's the only difference. There's also the lower revenue base, so even though gross profit, let's see, operating income was higher.
And then what I expected, it was on a lower revenue base because of the average selling prices being lower. So obviously that's being driven by the lower cost to get sold, which is nice to see.
You can see my expectation was actually for an increase there, quarter over quarter, just very slightly, and this declined pretty significantly, quarter over quarter. The main reasons for that were essentially highland and cyber truck related cost increases that I assumed would happen. And I wasn't sure because the transition happened so quickly. So I'm glad to see that that didn't really have too much of an impact, which is nice.
And maybe that indicates that the cost structure on highland is pretty strong and could even be a little bit better next quarter. Could be a positive there. And hopefully good things for 4680s too, because those have been big drains on cost for a while now. So if those are becoming less draining, that's going to be something that would move the needle here as well, which is obviously extremely difficult for us to be able to forecast those kind of impacts.
All right, so got the earnings call coming up in 50 minutes. Again, there's going to be a link for that down in the description. So we'll do the live blog and reaction afterward or live note taking whatever you want to call it and react afterwards. Trying to think here if there's anything else. Honestly, not anything too crazy here, not anything. I don't think too surprising.
Obviously, the earnings call can kind of change some of those things. See what the stocks do when we're at 201. So it's been pretty steady since the initial reaction, I guess. Maybe a little bit of volatility. I can hop back to the browser here, but a little bit of volatility, but nothing too crazy.
Now of course, I would prefer if it was 3% changed in the other direction. My guess for that is probably the lower revenues and the lack of really positive guidance. Guidance is usually one of the things that contributes most to reactions if earnings are roughly in line, which I would say these were roughly in line.
Yeah, so I'm just looking back at total sales. So $25,167, sorry, $25,167 million. That was about $500,000,000, $550,000,000 lower than analyst consensus, but only $160,000,000 that was driven from auto. So it's a little bit of a miss on revenue. I don't think they're going to care. Analysts or investors are going to care too much about any misses from energy or service. Again, those can be volatile. So with automotive not being incredibly different and I think with a positive margin surprise, those things should probably offset a bit. And then the operating costs were a little bit lower, almost $100,000,000 lower than analyst expectations and ultimately earnings per share pretty much ending up in the same spot. So yeah, maybe just related to guidance or just the lack of something that's super positive in terms of a surprise in there. Again, obviously the gap earnings per share number looks great and that's probably why it jumped immediately after hours with probably algorithms taking that number comparing it to estimates and trading based off of it and then real people looking at it, figuring out what's going on. And then maybe you have a counter reaction to that, honestly.
All right, so let's see. Quite a few super chats here. Thank you guys. I appreciate that. Appreciate all the nice comments on the last episode too. I mean, man, this audience is awesome. The Tesla community is awesome. It's tough for me to, it's a tough transition. I do enjoy this. I do enjoy hanging out and talking to people and I won't rehash everything that I said before. I just, you know, unfortunately don't have the time for it anymore on that cadence, but hopefully still be around to do stuff like this.
As I said, I do need a bit of a break just from this in time to, obviously it's a very busy time period for us and has been for a long time now with the first principles group, but just need to make sure that I'm dedicating enough time to that to give it what it needs. And it's important stuff. But I appreciate it. I mean, these comments, man, it's just awesome. I can't say it enough. It's just an amazing group. If you haven't gone to like Tesla events before, it's like this, right? It's just a lot of awesome, amazing people that have done cool stuff and are interesting and friendly and mission supportive and all these sort of things. It's a good group. So I would recommend that if you can get one. But thank you everyone for the super chats.
I'll try to see if there's questions in here. My software, like, I'll show you guys. It's kind of weird. Thank you Eric for this one. But there's like super stickers and it looks like it's someone saying something like the formatting is the same, but it just says it's like a hippo character. But I appreciate those two. I wish I could see the hippo. All right. So I'm just looking through the super chats for questions here. Perhaps the second most interesting part of the live stream. Second to watching me fill out numbers.
I just got to put this one on. Why do you sound like text to speech? Oh, man. That's a good one. I love it as a super chat too. Steve Mosher, thank you. Says thanks for, I know it's a little small. Thanks for having me happy with the report. Questions maybe past bottom, which should be positive. Hopefully, Elon isn't too gloomy on the call. Yeah, be an interesting call, especially with the compensation stuff he's been talking about.
And remember, we should see some sort of an update after this. Elon had mentioned a SpaceX company talk and then after the 10K, which had come out in about a week, he had mentioned doing a Tesla sort of update after that, which is interesting given that you have the opportunity to do so on an earnings call. But for some reason, you know, must have wanted to separate whatever that will be. Joel, thank you. I appreciate that. Hope you keep doing surprise episodes. Yeah, hopefully this wasn't a surprise. I did say some people said I was like quitting YouTube and stuff. Not just Tesla daily, as I said, just a little restrictive. So I'll be around. I do honestly, I do feel a little bit out of the loop already, though. So I'm seeing the value that Tesla daily had, which I'm really glad about, but I am feeling a little bit of the loop, which is, you know, obviously just have a head of their stuff going on.
But someone asked, I don't know if I can make this bigger. Let's see. Think that I can. Hopefully that's a little better. Do you see the next gen vehicle being released in China first? I know it's being developed in Austin, but wouldn't China make the most sense? Not first because, and the big reason that we've heard that it's going to happen in Texas versus somewhere like Mexico is because Tesla needs their staff and Elon and the executive team to be able to reveal the line and make updates and get this vehicle into production. They're going to want to do that here first. And if ultimately it is more cost effective to build it in China, where it happens first in terms of the cost of it, doesn't really matter, like the cyber trucks right now, those are going to cost Tesla a heck of a lot more than a hundred thousand dollar price they're selling them for during this period when you have all that depreciation and stuff hitting and all these other cost developments, all just on a few vehicles. Cost on that's going to be ridiculous, but as things ramp up, it's going to come down.
You could just take China as an extension of that concept, right? Like when the vehicle production process is in place, they can take it to China, they can iterate on it and all those sort of things. And if they wanted to do it in China first because they felt like their team, their development team or their production team there was superior, that choice made more sense. Obviously, you can make an argument for that based on what we've seen them accomplish so far, but Tesla's a US based company for this ultimately critical vehicle, it's probably going to make sense to build that in the US first. Gordon B.E. Larry, thank you guys, appreciate that.
你可以把中国看作这个概念的延伸对吧?比如说,当车辆生产流程就位时,他们可以将其带到中国,在那里进行迭代等一系列工作。如果他们想先在中国进行,因为他们觉得自己的团队、开发团队或者生产团队在那里更优秀,那这个选择就更合理了。显然,根据我们目前所见他们取得的成果,可以为此提出论据,但对于特斯拉来说,一家总部位于美国的公司而言,对于这款至关重要的车辆来说,首先在美国建造可能更有意义。感谢Gordon B.E. Larry,谢谢你们。
All right, I think we are going to wrap it up here and again, we're going to have the earnings call in about 45 minutes. The link for that is in the description. I hope everyone will join over there and we'll listen to the call together and then continue to conversation after that. But good to see everybody and good to be back talking Tesla again.