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Tesla shares soared after the world’s largest electric vehicle maker reported stronger-than-expected quarterly profits and forecast “mild growth” in deliveries this year and a big jump next year. 2025.
The performance marked a change for Teslawhich has endured a disappointing few quarters as concerns spread that global demand for electric vehicles is slowing. It has also been caught up in the divisive politics of its chief executive, Elon Musk, and a court battle to reinstate his $56 billion stock options package.
On Wednesday afternoon, Musk predicted vehicle sales could rise 20% to 30% next year after cost-cutting reduces prices of existing cars, which in turn should boost demand.
He also cited improvements in self-driving technology and new products, including self-driving cars. “Cybercab” debuted earlier this month. Musk also said lower interest rates are reducing monthly financing payments and that is having a significant impact on demand.
Tesla shares jumped 20% on Thursday, adding more than $100 billion to the company’s market value. That could bring relief to investors as the stock is half its November 2021 peak, although the group remains the most valuable global carmaker.
Adjusted net income in the third quarter rose 8% from a year ago to $2.5 billion, exceeding expectations of $2.1 billion. submit application from the Texas-based company. Revenue rose 8% to $25.2 billion, slightly below analysts’ average estimate of $25.4 billion.
Profits were boosted by a 2% increase in revenue from vehicle sales – which contributes four-fifths of group earnings – along with a 52% increase in the energy generation and storage business and a 29% increase in service sector, including its supercharger network.
Operating costs fell 6% to $2.3 billion after cutting a tenth of its workforce, about 14,000 jobs, earlier this year.
“Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024,” Tesla said. “Plans for new vehicles, including more affordable models, remain on track to begin production in the first half of 2025.”
However, Musk said Tesla is not developing a $25,000 “Model 2” as expected.
“We are not creating a non-robotic model. . . Yes often [$25,000] model is meaningless, it is completely irrelevant in terms of what we believe,” he said.
“This is obviously clear at this point, that [autonomy] is the future,” he added.
Instead, Musk said Tesla is focusing on reducing the cost of existing models. Its Cybercab will cost about $25,000, when government electric vehicle incentives are deducted.
Musk has made a strategic shift toward autonomous driving, artificial intelligence and robotics, predicting these technologies will soon become Tesla’s main sources of revenue and boost its valuation. He recently unveiled a prototype for a new fleet of self-driving “Cybercabs” that he hopes to put into production before early 2027.
However, there is a lack of technical or financial details in this flashy game Event “We, Robots” — held at a Los Angeles movie studio, where Tesla’s “Optimus” humanoid robots danced to Daft Punk and served beer to attendees — disappointed analysts and investors and stocks fell 9% afterward.
Third-quarter data brought more optimism. Tesla said Cybertruck production reported positive gross margins for the first time – after years of production delays and recalls – and was the third best-selling electric vehicle in the US behind the Model Y and Model 3. The company has added its “Semi” electric vehicle. The truck factory will begin production late next year, which Musk said is in “ridiculous demand.”
Earlier this month, Tesla reported deliveries rose 6.4% in the third quarter to 462,890 vehicles globally, as sales in China offset weak demand in Europe. It retains its position as the leading electric vehicle manufacturer ahead of China’s BYD.
Analysts on Wednesday also flagged an improvement in Tesla’s gross margin, rising to 19.8% in the quarter from 17.9% in the same period last year.
The closely watched financial metric was boosted by $739 million in revenue from regulatory credits the company sold to other manufacturers that failed to meet production-related emissions targets. tram. That was the second highest after a record $890 million in the second quarter.
Tesla also provided an update on the number of Nvidia H100 graphics processing chips installed at its Texas manufacturing plant to train the AI systems that underpin its self-driving technology, known as FSD . It said 29,000 have been installed in a cluster at the Gigafactory and this number will increase to 50,000 by the end of October.
Musk has attracted controversy for his strong support of Republican presidential candidate Donald Trump. He is giving 1 million USD a day to registered voters in swing states who signed petitions supporting freedom of speech and the right to bear arms.
In return, Trump has pledged to appoint Musk as head of the “department of government efficiency” to come up with proposals to cut spending, bureaucracy and regulations, a position that could be lucrative. benefits his other companies, including SpaceX and social media network X. However, those political activities risk inciting the ire of Democratic candidate Kamala Harris if she win.
