(Reuters) – Tesla said on Wednesday it expected to see little growth in vehicle deliveries this year and reported a higher-than-expected third-quarter profit margin.
The company also easily beat profit expectations.
“Despite continued 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 programs and manufacturing capacity,” Tesla said in a statement.
The company said it delivered growth in vehicle deliveries in the third quarter, resulting in record volumes. It also recognized the second-highest quarter of regulatory debt revenues.
Its third-quarter profit margin from auto sales, excluding regulatory credits, rose to 17.05% from 14.6% in the previous three-month period, according to Reuters calculations.
Wall Street had expected the figure to be 14.9%, according to 24 analysts polled by Visible Alpha.
Tesla said labor and material costs to make vehicles, known as cost of goods sold per vehicle, have fallen to an all-time low of about $35,100.
The prices of raw materials used to make EV batteries are falling, and Tesla said its costs will fall this year as a result, with the effect diminishing over time.
A 7% rise in Tesla shares after hours almost added up
$50 billion in stock market capitalization. The stock fell 2% during Wednesday’s trading session.
Tesla said earlier this month that its September quarter deliveries grew more than 6% year-over-year, marking the first quarter of growth since a decline in the January-June period.
The company cut prices last year, leading to a sharp decline in profit margins. This spring, it shifted its strategy to offering cheaper financing options and discounts, which analysts said could reduce its margin bleeding in the coming quarters.
Earlier this month, Tesla announced its robotaxi product, dubbed the CyberCab, and a 20-seat self-driving van to accelerate development of its autonomous technologies, including the Optimus humanoid robot.
According to data compiled by LSEG, revenue for the July-September quarter was $25.18 billion compared with $25.37 billion. It had sales of $23.35 billion in the same quarter of 2023.
Adjusted profit was 72 cents a share in the third quarter, beating the average estimate of 58 cents.
The company’s profit margin for the July-September period was 19.8%, beating estimates of 17.3%, according to 21 analysts polled by LSEG. It was 18% in the second quarter.
(Reporting by Akash Sriram in Bengaluru and Abirub Roy in San Francisco; Additional reporting by Noel Randevich in Oakland, California; Sayantani Ghosh; Writing by Sriraj Kalluvila, Peter Henderson and Matthew Lewis)
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