Tesla announced a surprise third-quarter earnings gain late Wednesday, with quarterly profit growing 9%, capping off a big month of announcements for the EV giant. Revenue came in light. But Tesla stock surged after the close Wednesday.
On the Tesla earnings call, Chief Executive Elon Musk was calmly bullish throughout, upbeat on full self-driving, vehicle deliveries, storage and more.
6.39 p.m. ET
That's A Wrap
The Tesla earnings call ended at 6:37 p.m. ET, with Elon Musk bullish on a variety of fronts after Tesla reported strong earnings and margins.
Tesla stock is up 12% in extended trading, adding to gains as Musk spoke.
6:35 p.m. ET
Musk: 'Some Chance' FSD HW 3.0 Won't Reach Self-Driving
Musk said that Hardware 4 has "several times the capability of Hardware 3 and that it takes a lot of effort to sort of squeeze that functionality out of Hardware 3." The Tesla chief added that there is "some chance" Hardware 3 does not "achieve the safety level that allows for unsupervised FSD." Musk added, "There is some chance of that and if that turns out to be the case, we will upgrade those who bought Hardware 3 for free."
6:27 p.m. ET
Tesla Roadster Update
Musk says they are close to "finalizing the design" on the Tesla Roadster. The Tesla chief thanked the "long suffering Tesla Roadster deposit holders." Musk also teased that it indeed could be a flying car.
6:12 p.m. ET
Tesla Recognizes FSD Revenue
Tesla recognized $326 million of FSD revenue in Q3, executives said on the call. Tesla recognizes already-collected FSD revenue when it reaches certain goals, but has a fair amount of discretion. The FSD revenue, essentially pure profit, contributed to the strong Q3 earnings and margins.
16:06 p.m. ET
Affordable EV Below $30,000, With A Catch?
Musk, apparently discussing the upcoming affordable vehicle, said "with incentives" it will be "sub $30K."
If that assumes the $7,500 IRA tax credit that implies that the affordable EV will be below $37,500, but perhaps not substantially so. That would not be a big drop vs. the current Model 3 and Y.
5:54 p.m. ET
Tesla Energy Boom
Musk projects that it "won't be long" before Tesla is shipping 100 gigawatt hours a year in stationary storage.
Tesla's Megapack factory in Shanghai is close to completion.
5:50 p.m. ET
Musk Sees Ride Hailing FSD Service In California, Texas
Reiterating comments made at the Oct. 10 robotaxi event, Musk says the plan is to roll out ride hailing service to the public in California and Texas next year. "Maybe some other states, actually next year, but at least California and Texas."
That is subject to regulatory approval, he noted.
5:45 p.m. ET
Musk Sees Self-Driving In Q2 2025
Internal estimate is for FSD by Q2 2025 to be safer than human driving, Musk says.
Musk has said the take rate for FSD — people buying or subscribing the system — has "improved substantially," especially since the robotaxi event on Oct. 10, but gave no specifics.
5:42 p.m. ET
Tesla Stock Adds To Gains On Call
Tesla stock is now up 11% in late trading, after surging heading into the earnings call.
5:40 p.m. ET
Musk Sees '20%-30%' Vehicle Growth In 2025
"To take a bit of risk here" — Something like 20%-30% vehicle sales growth next year is "my best guess" Musk says.
He added that he sees CyberCab reaching volume production in 2026. "We're aiming for at least 2 million units a year of Cybercab."
The CyberCab, unveiled at the Oct. 10 robotaxi event, has no steering wheel or pedals. It will require full autonomy to be on the roads.
5:37 p.m. ET
Elon Musk: Energy 'Growing Like Wildfire'
The energy storage business is growing like wildfire," Musk says on the call, "with strong demand."
5:34 p.m. ET
Tesla Earnings Call Starts
The Tesla earnings call was set to start at 5:30 p.m. ET, kicking off at 5:32 p.m.
5:29 p.m. ET
Affordable EV On Track A Positive
CFRA analyst Garrett Nelson noted late Wednesday that the more affordable vehicle models remaining on track for first production in the first half of 2025 is a positive. "In our view, 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. The key question is the sustainability of TSLA's Q3 gross margin," Nelson said.
5:26 p.m. ET
'Huge Step' For Tesla Story
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote late Wednesday that the Q3 report is a "huge step in the right direction for the Tesla story in our view."
Ives added that the automotive ex-credits gross margin beat is "clearly an indication that Musk & Co is continuing to focus on its profitability side while balancing its plans for the future."
5:06 p.m. ET
Tesla Stock Jumps, But What Else?
Tesla stock is up 9% in late trading, signaling a move back above the 50-day line. That's lifting Nasdaq 100 futures slightly, but the broader impact is muted. Rivian is up slightly along with China EV makers such as Li Auto and Nio. But those are have relatively small market caps.
4:53 p.m. ET
Have Tesla Auto Margins Bottomed?
@TroyTeslike on X says auto gross margins excluding regulatory credits jumped to 17.1% in Q3 vs. 14.6%.
4:45 p.m. ET
Tesla Cybertruck Gross Margin Positive
The Cybertruck achieved a positive gross margin for the first time in Q3, according to Tesla.
Tesla recently discontinued the Foundation series Cybertruck variants that cost an extra $20,000. The regular Cybertruck variants now cost $79,990 and $99,990. The former will likely be eligible for IRA tax credits soon. Cybertruck orders, and quick deliveries, are open to anyone, suggesting that a big reservation list didn't result in massive actual orders.
4:35 p.m. ET
Tesla Needs A Big Q4
With Tesla predicting slight vehicle delivery growth in 2024 vs. 2023's 1.8 million, the EV giant needs far more than than the the Q4 2023 record of 484,507 deliveries. Analyst consensus currently has Q4 deliveries hitting 487,000 and a total of 1.78 million deliveries in 2024, according to FactSet.
As noted below, Tesla has ramped up incentives in recent days, with 0% financing and big inventory discounts on the Model 3 and Y in the U.S.
4:27 p.m. ET
Cost Of Goods Hits New Low
Tesla reported the cost of goods sold per vehicle hit a historic low of $35,100. That was another big contributor to the gross margin and earnings beats.
4:24 p.m. ET
AI Data Center Progress
We deployed and are training ahead of schedule on a 29k H100 cluster at Gigafactory Texas – where we expect to have 50k H100 capacity by the end of October.
Tesla Earnings
The electric-vehicle giant reported Wednesday that Q3 earnings grew 9% to 72 cents per share. Meanwhile, revenue totaled $25.18 billion, up 8% vs. the year-earlier quarter. Analyst consensus predicted Tesla EPS of 59 cents per share with sales coming in at $25.47 billion. However, some had the revenue coming in lower than that number.
Tesla reported that total gross margins came in at 19.8%, up 195 basis points compared to a year ago. Tesla Energy gross margins hit a record 30.5%.
Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025, Tesla reported Wednesday.
Tesla added that the refreshed Model 3 ramp up continued successfully in the third quarter with higher total production and lower cost of goods sold quarter-over-quarter.
The company said Cybertruck production increased sequentially and achieved a positive gross margin for the first time. Preparation of the Semi factory continues and remains on track with builds scheduled to start by the end of 2025.
In early October, Tesla reported global third-quarter deliveries increased 6% compared to a year ago, the third-best quarterly total ever. It was the EV giant's first return to vehicle-unit sales growth in 2024, buoyed by a strong performance in China. However, Tesla saw weaker vehicle sales in the U.S. and Europe.
Notably, Tesla expects to report higher deliveries for the full year, which will require a big gain in Q4.
"Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024," Tesla said in its earnings release. "Energy storage deployments are expected to more than double year-over-year in 2024."
In the past few days, Tesla has announced 0% financing for Model 3 and Y purchases in the U.S. while inventory discounts are picking up substantially.
Tesla Earnings Call
Analysts and investors head into the Tesla earnings call looking for details about full self-driving, or FSD, specifics and information on the still-unseen "affordable" vehicle as well as any commentary on the long-awaited Model Y refresh.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote on Monday the focus will be on Chief Executive Elon Musk's comments around the consumer EV demand environment heading into the fourth quarter and next year.
Tesla Stock Performance
TSLA stock jumped more than 7% in late trade after closing down 2% to 213.65 during market trade on Wednesday. Shares could retake the 50-day moving average on Thursday.
Tesla stock has dropped more than 18% in October, booking the worst weekly loss since April between Oct. 7-Oct. 11. TSLA capped that week with a 8.8% tumble, falling decisively below its 50-day line in heavy volume.
The Oct. 11 sell-off followed the much-hyped Tesla robotaxi event.
Tesla Robotaxi Event: Cybercab, Robovan Unveiled; Musk Sees Self-Driving 'Next Year'
The stock has a cup-with-handle base with a traditional buy point of 264.86, according to MarketSurge charts. Shares have been stuck below the 50-day line for the past several sessions.
Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has a 52 Composite Rating out of a best-possible 99. Shares also have a 52 Relative Strength Rating and a 57 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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