Tesla profits beat Wall Street expectations

Tesla beat Wall Street’s profit expectations for the third quarter after the world’s most valuable automaker increased vehicle deliveries and cut its production costs.
The electric car company led by Elon Musk reported net income of $2.2 billion, up 17 per cent on the same period a year ago and ahead of analyst estimates of $1.7 billion. Revenue increased 8 per cent to $25.2 million, just below forecasts of $25.5 billion.
The results sent Tesla’s shares up $20.24, or 9.5 per cent, to $234 in after-hours trading in New York.
Tesla said the increased profit was driven by lower vehicle production costs, including lower raw material prices and lower freight duties, as well as growth in vehicle deliveries and lower operating expenses.
Figures published ahead of the results showed that Tesla delivered 462,890 cars in the period, a 6.4 per cent rise compared with the same quarter last year.
This marked Tesla’s first quarter of year-on-year delivery growth for 2024. In the first and second quarters, deliveries dropped by around 9 per cent and 5 per cent respectively.
“Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024,” Tesla said on Wednesday. The company said it was on track to launch more affordable models in the first half of 2025.
Tesla’s energy generation and energy storage business reported a 52 per cent increase in revenue for the quarter to $2.4 billion.
The results indicated the beginning of a recovery in China, where Tesla has been grappling with intense competition from local EV rivals and dampened consumer demand. The company has been boosting its promotions in the region, offering discounts on some models as well as zero-interest loans.
Wall Street has been betting on huge growth at the company, driven by its investments in self-driving software, robotaxis and artificial intelligence.
However, Tesla shares had dropped by around 8 per cent after Musk previewed Tesla’s robotaxi at an event in California earlier this month, as investors felt the company had failed to provide sufficient detail around its go-to-market strategy. Tesla said the vehicles showcased its long-term goal of offering “autonomous transport with a cost per mile below rideshare, personal car ownership and even public transit”.
On a call with analysts yesterday, Musk said: “I think if you look at EV companies worldwide, to the best of my knowledge, no EV company is even profitable…So it is notable that Tesla is profitable despite a very challenging automotive environment.”
Musk said he expects lower-cost vehicles will drive sales growth of between 20 per cent and 30 per cent next year, assuming there are no negative external events, such as a war or interest rate rise.