Tesla’s fourth-quarter net income fell 71% from a year ago when results were boosted by a one-time tax benefit. The latest results fell short of Wall Street forecasts.

The electric vehicle company run by Elon Musk said Wednesday that it made $2.31 billion from October through December, less than the $7.93 billion profit it posted in the same period in 2023.

Excluding one-time items in both periods, the Austin, Texas, company's profits rose 3% to 73 cents a share, still not enough to meet analysts' estimate of 77 cents a share.

Tesla stock initially fell after trading closed Wednesday, then reversed course to rise more than 3%, adding to a steep climb since Donald Trump was elected president as investors bet Musk's advisory role in the new administration will help the company.

Revenue in the quarter rose 2% to $25.7 billion, less than Wall Street forecast for $27.1 billion, according to FactSet.

The slight rise in revenue came after Tesla offered a series of incentives to drum up demand for its electric vehicles including low-interest loans and lower prices.

Tesla has been losing market share in several countries as traditional car makers and other EV companies, such as China's BYD, offer customers alternatives.

In its letter to shareholders released Wednesday, Tesla said it was working to drive the cost of its vehicles lower, highlighting that one measure fell below $35,000, the lowest in its history.

The company said production of “more affordable” models are expected to star in the first half of the year, though at “less cost reduction” than previously expected. It also said it hoped to offer completely unsupervised self-driving technology to Tesla customers later this year.

Tesla’s gross profit margin fell to 16.3% for the quarter, down 1.3 percentage points from a year earlier.

Earlier this month, Tesla said it sold 1.79 million vehicles in 2024, the first drop in more than a dozen years despite offers of 0% financing, free charging and low-priced leases. The fourth quarter showed signs of a rebound, though, with a record 495,570 vehicles sold.

For the full year, Tesla posted profits before one-time items of $8.42 billion, down 23% from the year earlier.

Investors are expecting that Musk's close relationship with Trump will translate into lighter regulation on the car company, fewer investigations and help in speeding the development of autonomous driving.

But the Trump administration has also vowed to cut government incentives to customers to buy EVs and says it will loosen emission standards. The latter especially could hurt Tesla because it has a big business in selling “regulatory credits” to other automakers that fall short of the standards.

The latest financial report showed that in the fourth quaretr Tesla sold $692 million in these credits, a spigot of cash that could be turned off if Trump follows through on his vow.