Tesla plans Mag 7 spending spree analyst calls 'difficult to justify'

Core Insights - Tesla's fourth-quarter earnings showed a decline in deliveries for the second consecutive year and a drop in revenue for the first time ever [1][3] - The company reported earnings of 50 cents per share, exceeding analyst estimates, with revenue of $24.9 billion, slightly above expectations [2] - Full-year revenue decreased to $94.8 billion from $97.7 billion, with a significant drop in vehicle deliveries [3] Financial Performance - Q4 vehicle deliveries fell 16% quarter-over-quarter and 8.6% year-over-year, with auto sales down 11% compared to the previous year [2][3] - Tesla shares have declined over 5% this week and nearly 8% over the past four weeks, reflecting investor concerns about the company's performance [3] Capital Expenditure Plans - Tesla announced a $20 billion capital expenditure plan aimed at increasing future profits, which has raised skepticism among analysts at BNP Paribas [4][5] - The company plans to discontinue 40% of its driving products, including the Model S and Model X, to focus on future technologies like robotics and AI [9] - Analysts question the sustainability of Tesla's increased spending, which is more than double its previous capex of $8.5 billion in 2025 [10] Production and Deliveries - In Q4, Tesla delivered 406,585 Model 3 and Y vehicles, with total production of 422,652 for these models [8] - The company is reallocating production space from discontinued models to build Optimus robots as part of its strategic shift [9][10]