Tesla posted stronger-than-expected third quarter earnings Wednesday, and said it expects to grow overall vehicle deliveries this year, as investors look for guidance on the groups AI and full-self driving ambitions and the near-term future of its recent robotaxi launch.
Tesla (TSLA) said adjusted earnings for the three months ending in September were pegged at 72 cents per share, up nearly 6% from the same period last year and 5 cents well head of the Street consensus forecast of 58 cents per share. Group revenues, Tesla said, rose 7.8% from last year to $25.18 billion, falling just shy of analysts' forecasts of a $25.37 billion tally.
Gross automotive margins were 19.8%, a modest increase from last year that stopped Street forecasts of around 17%, suggesting that price cuts are largely under control following a long global EV price war and intensifying competition in China.
Related: Tesla stock price slides ahead of Q3 earnings
"We delivered strong results in Q3 with growth in vehicle deliveries both sequentially and year-on-year, resulting in record third-quarter volumes," the company said in a statement. "We also recognized our second-highest quarter of regulatory credit revenues as other OEMs are still behind on meeting emissions requirements."
"Despite sustained macroeconomic headwinds and others pulling back on EV investments, we remain focused on expanding our vehicle and energy product lineup, reducing costs and making critical investments in AI projects and production capacity," Tesla added. "We believe these efforts will allow us to capitalize on the ongoing transition in the transportation and energy sectors."
More Tesla:
- Analyst updates Tesla stock price target ahead of key robotaxi event
- Tesla drops bombshell ahead of anticipated robotaxi event
- Forget Waymo: Some Uber and Lyft drivers exploit this Tesla tech
Tesla shares were marked 9.16% higher in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $233.23 each.
Snapshot of a mainly positive $TSLA Quarter: pic.twitter.com/bpIEaL0UzL
— Brad Freeman (@StockMarketNerd) October 23, 2024
Tesla, which earlier this year cautioned the 2024 deliveries would be "significantly lower" that 2023 levels, shifted around 463,000 vehicles over the three months ending in September, a 6.4% increase from last year that snapped a streak of two consecutive quarterly declines.
Despite Tesla's earlier warnings, Musk has said the group can top last year's record 1.8 million delivery tally, but that would require a blowout fourth quarter performance of more than half a million - and possibly further price cuts or incentives.
Musk told investors late Wednesday that he sees Tesla growing vehicle deliveries by between 20% and 30% in 2025. He also said the new cybercab would reach volume production in 2026 and hopes to make around 2 million units per year after that.
"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," said CFRA analyst Garrett Nelson.
"The key question is the sustainability of Tesla's Q3 gross margin. We maintain a Hold rating, as we continue to view Tesla's valuation as fair," he added. "We also think consensus estimates that assume nearly 80% EPS growth between 2024 and 2026 are unrealistically high."
Related: Veteran fund manager sees world of pain coming for stocks
