Elon Musk-owned Tesla Inc. shares rallied as much as 4% in extended trading on Wednesday despite the company reporting a disappointing quarter on both revenue and the profit front. After the initial drop, shares recovered after the management promised growth to return in 2025.

Tesla reported $25.71 billion in revenue for the fourth quarter, a growth of just 2% from the same quarter last year. Analysts were working with a figure of $27.26 billion. Its adjusted Earnings Per Share (EPS) stood at $0.73, again lower than the $0.76 consensus estimate of analysts.

The company’s core automotive revenue fell 8% from last year below the $20 billion mark. $692 million of those came from regulatory credits. It cited reduced average selling price across its Model 3 and Y, and S and X lines as a key factor behind the decline.

Operating margin fell to 6.8% from 8.2% last year and 10.8% in the previous quarter.

Full year deliveries stood at 1.8 million, marking the first annual decline for Tesla.

The maker of electric vehicles cited advancements in vehicle autonomy and new model plans as it predicted a “return to growth in 2025.” Tesla also forecast an acceleration in AI, software and fleet-based profit in a statement Wednesday that detailed fourth-quarter results.

Still, the company stopped short of committing to the ambitious goals recently laid out by Chief Executive Officer Elon Musk, who has predicted as much as 30% growth this year.

Tesla said plans to sell more affordable vehicles remain on track, with production set to start in the first half of this year. The Cybercab also is on track for 2026.

The company said it plans to make the new vehicles using a mix of current production methods and a next-generation platform. The strategy will lead to higher costs than previously expected but will allow Tesla to expand vehicle volumes more efficiently during “uncertain times.”

Garrett Nelson, an analyst with CRFA, said the outlook is being positively received by investors because it seems more grounded following a tough 2024.

“The bar has been lowered to much more achievable levels, so therefore they are much more likely to hit it going forward,” Nelson said.

He added that Musk’s relationship with Trump is also seen as a positive as Tesla focuses on autonomy and the potential for changes to federal regulations.

Tesla shares traded 4.8% higher as of 6:30 PM New York time at $408.17 post the results. The stock ended 2.3% lower in regular trading.

(With Inputs From Agencies.)