Tesla’s strong Q3 results mark a turnaround which had experienced declines in both sales and profits during the first half of the year
In an announcement made on Wednesday, Tesla reported a 17.3 per cent year-on-year increase in net income for the third quarter. This growth was attributed to strong sales of electric vehicles (EVs). CEO Elon Musk shared positive expectations for ongoing expansion, forecasting a potential sales surge of 20 per cent to 30 per cent by 2025. However, Musk also noted that external influences might impact these projections, according to a report by AP.
The impressive performance in the third quarter signifies a positive change for the Texan car manufacturer from Austin, which saw a drop in sales and profits in the initial six months of the year. Tesla, in its communication to shareholders, anticipates a small increase in vehicle shipments for the year 2024, exceeding the 1.8 million cars delivered worldwide in the previous year.
Between July and September, Tesla reported a revenue of $2.17 billion, marking an increase from $1.85 billion in the corresponding period of 2023. Despite implementing price reductions and offering low-interest financing to boost sales of its older vehicle models, Tesla managed to achieve its first year-on-year profit growth in 2024. The company’s revenue saw a 7.8% growth to reach $25.18 billion, slightly below Wall Street’s projection of $25.47 billion. Nevertheless, Tesla surpassed expectations by delivering an adjusted profit of 72 cents per share, exceeding analysts’ predictions of 59 cents.
After the financial results were announced, Tesla’s stocks experienced a remarkable surge of almost 12% during the post-market trading session.
During a discussion with analysts, Musk emphasized the obstacles presented by exorbitant loan interest rates within the automotive sector, yet underscored Tesla’s robust standing. Musk noted, “As far as I am aware, no other electric vehicle company is currently turning a profit.
In the recently published Q3 report, Tesla disclosed that it sold 462,890 vehicles in the period spanning from July to September. This figure represents a 6.4% growth compared to the same timeframe last year, exceeding the projections set by analysts.In the recently published report for Tesla’s Q3 vehicle sales, it was disclosed that the company sold 462,890 units during the period from July to September. This figure represents a growth of 6.4% compared to the same timeframe in the previous year, exceeding what analysts had anticipated.
Tesla revealed its intention to commence the manufacturing of a range of budget-friendly vehicles by the beginning of 2025. Although details regarding the models and pricing remain undisclosed, Elon Musk suggested a cost below $30,000, taking into account potential tax benefits. Previously, Tesla had set a goal of $25,000 for its forthcoming vehicle lineup.
In another turn of events, Tesla unveiled a two-seater robotaxi named the “Cybercab” during an event in Hollywood. Musk mentioned that manufacturing of this vehicle, expected to be priced at approximately $25,000, might commence by 2027.
Tesla has successfully managed to drive down the per-vehicle cost of goods to a historic low of around $35,100 through strategic cost-cutting measures. While the company’s gross profit margin has climbed to 19.8%, marking its highest point in a year, it remains below the peak of 29.1% observed in the first quarter of 2022.
Among its achievements, Tesla disclosed revenue of $739 million from regulatory credits, marking its second-highest amount ever recorded. This was attributed to the sale of credits to fellow automakers facing challenges in achieving emissions objectives.
Musk has mentioned that Tesla’s “Full Self-Driving” (FSD) technology is expected to outperform human drivers in terms of safety by mid-2025. He did highlight the possibility that earlier iterations of the system could fall short of the required benchmarks, prompting Tesla to offer complimentary hardware upgrades in such instances.
Following four Tesla-related crashes, U.S. regulators have initiated an investigation into the performance of the FSD system in challenging low-visibility conditions. The National Highway Traffic Safety Administration is scrutinizing the system’s ability to adequately identify and react to obstacles such as sun glare, fog, and dust.
Edward Jones’ analyst Jeff Windau pointed out that Tesla is currently reaping the benefits of its high-margin software services. Despite this positive development, Windau opted to maintain a “hold” recommendation on the stock, expressing concerns about Tesla’s ambitious pursuits in robotics and self-driving cars. He emphasized the formidable nature of the targets set by the company.
