In the latest financial report, Tesla Inc. announced that its net income more than doubled in the last quarter, primarily due to a one-time tax benefit. The Austin, Texas-based electric vehicle manufacturer reported a net income of $7.93 billion for the period from October to December, compared to $3.69 billion in the same period the previous year.

However, after excluding one-time items, such as the noncash tax benefit of $5.9 billion for deferred tax assets, the company's earnings reached $2.49 billion, or 71 cents per share. This marked a decrease of 39% compared to the previous year and fell short of analysts' estimates, with FactSet reporting expected earnings of 73 cents per share.

While quarterly revenue increased by 3% to $25.17 billion, it also fell short of analyst estimates of $25.64 billion. Tesla attributed the decline in profits to its worldwide price cuts throughout the year, aimed at boosting sales and market share. Some of these price cuts reached up to $20,000, particularly on higher-priced models.

Despite reporting a nearly 20% increase in fourth-quarter sales, driven by the steep price cuts in the U.S. and worldwide, Tesla experienced a slower sales growth rate compared to previous quarters. For the full year, the company reported a sales growth of 37.7%, falling short of CEO Elon Musk's prediction of 50% growth in most years. The quarter saw Tesla deliver 484,507 vehicles, with its lower-priced Models 3 and Y accounting for the majority of sales.

Tesla's position as the world's top-selling electric vehicle company was overtaken by China's fast-growing powerhouse, BYD, in the fourth quarter. In a letter to shareholders, Tesla warned of a potentially "notably lower" sales growth rate this year as it focuses on launching a next-generation vehicle at its Austin, Texas factory. The company acknowledged being between two significant growth waves: one from global expansion of the Models 3 and Y and the other stemming from the upcoming next-generation vehicle.

Tesla also stated that Cybertruck deliveries would ramp up throughout this year. Furthermore, the company anticipates that revenue growth from energy storage will outpace its automotive business in the coming months.

The fourth quarter also saw Tesla release the latest version of its "Full Self-Driving" software to employees and selected customers for testing. This new version utilizes artificial intelligence to assist with steering and pedals, taking a departure from the "hard coding" of driving behaviors. However, Tesla emphasized that the system still requires owner intervention and cannot operate autonomously.

Following the release of this financial update, Tesla's shares dropped 4.4% in after-hours trading on Wednesday. The company's gross profit margin for the quarter fell to 17.6%, down 3.8 percentage points from the previous year, primarily due to the impact of price cuts on profitability. In 2022, Tesla reported a gross profit margin of 25.6%, which decreased to 18.2% in the last year, excluding the one-time tax benefit.

With Tesla anticipating slower sales growth in the near future, investors and industry analysts will closely watch how the company navigates its challenges while striving to maintain its position as a leading electric vehicle manufacturer.