Growth forecast: The Tesla Inc Gigafactory in Shanghai. Musk said he expects to see continued growth next year, providing a “rough estimate” of delivery volumes. — Bloomberg
NEW YORK: Tesla Inc surpassed Wall Street estimates for earnings in the third quarter for the current year (3Q24) and projected a slight increase in deliveries, reflecting a rebound in demand for its electric vehicles.
The company on Wednesday reported adjusted earnings of 72 US cents per share for the quarter, above the average analyst estimate and snapping four consecutive quarters in which the measure missed expectations.
It reiterated plans to start production of more affordable models in the first half of 2025 (1H25), saying it projects 50% growth next year over its 2023 production volumes.
Shares of the company soared as much as 12% in post-market trading Wednesday after closing regular trading down 14% for the year.
Tesla said it expects another strong quarter of deliveries after a record third quarter, anticipating higher volumes for the full year.
It won’t be easy, given the slowdown in deliveries Tesla posted in 1H24, and the carmaker will need to significantly increase sales in 4Q24 to surpass – or even match – 2023’s level.
Chief executive officer Elon Musk said he expects to see continued growth next year, providing a “rough estimate” of delivery volumes.
“I think it’s 20% to 30% vehicle growth next year, notwithstanding negative external events,” he said on a conference call with analysts.
Tesla said its Cybertruck, which it first delivered late last year, has reached profitability for the first time, thanks in part to increases in production for the futuristic pick-up truck.
The company’s third-quarter automotive gross margin, excluding regulatory credits, was 17.1%, up from the previous quarter, when it was 14.6%.
Morningstar analyst Seth Goldstein said Tesla is benefiting from higher volumes and more stable prices.
“Prices are stabilising and unit costs are coming down,” he said in an interview.
CFRA Research analyst Garrett Nelson said investors had a low bar for this quarter and questioned whether Tesla can sustain that level of profitability.
“Expectations were low heading into the release after four consecutive bottom-line misses and a Robotaxi Day that left investors with more questions than answers,” Nelson said in a research note to clients.
Tesla attributed its profit gains to its higher delivery volumes and also booming sales of regulatory credits to other carmakers needing help to meet their emissions requirements.
Revenue from regulatory credits came to US$739mil in the three months ended Sept 30 – a record for the period but below the US$890mil it earned in 2Q24.
The company also released more details about its robotaxi, the vehicle without controls such as pedals or a steering wheel that was unveiled earlier this month.
Tesla said it will use a new unboxed manufacturing technique for the vehicle, which is different from a traditional production line in that parts are assembled simultaneously in dedicated areas and put together at the end.
On the call, Musk said Tesla expects to roll out autonomous ride hailing to the public next year in Texas and California.
He added that might be expanded to “maybe some other states, actually, next year as well.”
He has a history of promising ambitious timelines for the company’s products and services only to later announce delays.
The company will need to overcome a number of regulatory hurdles before any widespread release of its autonomous vehicles.
Tesla also continued to expand its charging network, after the high-profile layoff of much of its supercharging team earlier this year.
The company added 2,800 new stalls in 3Q24, a 22% increase from the previous year. — Bloomberg
