On October 23, Tesla reported its third-quarter earnings, which exceeded Wall Street expectations, alongside an optimistic outlook for the remainder of the year, forecasting a “slight growth” in vehicle deliveries. This news led to a 12% surge in Tesla’s stock price during after-hours trading.
The company’s automotive gross margin increased to 17.1% in the last quarter, and it expects overall vehicle deliveries for the year to grow.
Tesla’s revenue rose by 8% to $25.18 billion, slightly below the anticipated $25.37 billion, while net income grew by 17% to $2.17 billion. Adjusted earnings per share reached 72 cents, significantly higher than the analysts’ average estimate of 58 cents.
The company attributed its profit growth to two main factors: an increase in vehicle deliveries and a significant rise in revenue from the sale of carbon credit allowances, recording $739 million—marking a record for that quarter. Automotive revenue grew by 2% from $19.63 billion in the previous year to $20 billion, remaining relatively stable since late 2022. Excluding carbon credit sales, the automotive gross margin saw a substantial increase from 14.6% to 17.1%.
During the earnings call, CEO Elon Musk reiterated Tesla’s plan to begin production of more affordable vehicle models in the first half of 2025 and projected a 50% increase in production for the upcoming year compared to 2023.
Following the earnings announcement, Tesla’s stock jumped to $239.35 per share. However, the stock has decreased by 14% for the year so far.
Tesla noted that after achieving a record delivery number of 462,890 vehicles in the third quarter, it anticipates another strong quarter ahead, expecting overall growth for the year despite challenges. The company will need to significantly ramp up sales in the fourth quarter to surpass or match their delivery totals for 2023.
Musk indicated that he expects a vehicle delivery growth of 20% to 30% next year, attributing this anticipated increase to reduced vehicle costs and the emergence of “autonomous driving technology.”
Additionally, Musk announced the development of a ride-hailing app that some employees in California have already begun using. “You can summon a car, and it will take you anywhere in the Bay Area… we now actually have a safe driver,” he said. He foresees launching this service to the public in California and Texas next year, with future plans for its integration into a self-driving taxi network.
Moreover, Tesla shared that its recently launched Cybertruck, which began deliveries last year, has turned a profit for the first time, supported by increased production. The Cybertruck is now the third best-selling electric vehicle in the U.S., following the Model Y and Model 3, while the Semi truck is expected to start mass production by the end of next year.
When asked about plans for a lower-cost electric vehicle beyond the recently announced Cybercab, Musk clarified that all future vehicles from Tesla will feature autonomous driving capabilities. He mentioned that out of the 7 million cars Tesla has produced, “the vast majority have autonomous driving capability,” adding that the company currently receives orders for 35,000 self-driving cars each week.
Tesla continues to expand its charging network, having added 2,800 new charging stations in the third quarter alone, representing a 22% year-over-year growth, despite earlier reports of significant layoffs in its Supercharging team.
