Shares in electric car maker Tesla Inc. dropped in after-hours trading today after the company missed its fourth-quarter earnings estimate.

For the quarter ended Dec. 31, Tesla reported a profit of $270 million or 24 cents per share, up from $105 million or 11 cents a share, compared to the same quarter in 2019. Revenue rose 46% year-over-year, to $10.74 billion, thanks to substantial growth in deliveries that was offset by increased production costs.

According to MarketWatch, analysts had expected Tesla to report adjusted earnings of $1.02 per share on sales of $10.47 billion.

Gross margins in the quarter came in at 19.2%, the lowest figure for Tesla since the last quarter of 2019. Capital expenditure hit $1.15 billion in the quarter. Free cash flow was reported at $2.79 billion, up from $1.08 billion a year ago.

The mix of Tesla models also caused the company’s average selling price to fall 11% as more buyers switched to the cheaper Model 3 and Y rather than the more expensive Model S and Model X.

In an earnings call, founder and Chief Executive Officer Elon Musk noted that a new Model S will be launched in February along with a new Model X a “little bit later.” The current models were both launched in 2019.

Musk also said on the earnings call that Tesla plans to make its premium driver-assistance software, marketed as the Full Self Driving option, available on a subscription basis. The option was previously available only as a $10,000 add-on to Tesla buyers. According to CNBC, Musk also said that drivers who previously purchased FSD for their Tesla vehicle could not transfer the software to another Tesla, should they buy another one.

Musk remained forever the optimist, however, noting that “2021 is going to be a great year for Tesla,” adding that “I’m super excited about the future and we look forward to making it happen.”

The optimism and salesmanship of Musk aside, investors were not impressed. Shares in Tesla, which were already down in regular trading 2%, to $864.16, dropped 5% more in after-hours trading.

Photo: Jakob Härter/Flickr