Tesla stock ( TSLA ) rose on Thursday after investors focused on the positives from mixed third-quarter earnings results.
In addition to news that Tesla’s cheapest electric vehicle is on track for production next year, investors were cheered by adjusted earnings per share and higher gross margins. Tesla’s volume growth next year will be 20% – 30%, CEO Elon Musk said in an earnings call.
Tesla shares ended nearly 22% higher, adding billions of dollars to the company’s market valuation in its best day since 2013.
Tesla reported revenue of $25.18 billion, short of the $25.4 billion expected by the Bloomberg consensus, but higher than the $25.05 billion it reported in Q2 and topping the $23.4 billion Tesla reported a year ago. Tesla posted adjusted earnings per share of $0.72 and expected $0.60 on net income of $2.5 billion and free cash flow of $2.9 billion.
The closely watched gross margin figure was 19.8%, higher than the expected 16.8%.
“We delivered strong results in Q3 with continued and year-over-year growth in vehicle deliveries, resulting in record third-quarter volumes,” the company said in its earnings platform. “Preparations are underway for the delivery of our new vehicles – including the most affordable models – which we will begin in the first half of 2025.”
Earlier this month, Tesla reported third-quarter deliveries that slightly missed expectations, sending shares lower.
Tesla said it delivered 462,890 vehicles in Q3, up 6.4% quarter-on-quarter, marking its first quarter of delivery growth this year. These numbers come on top of the 435,059 EVs the company delivered in the year-ago period. But Wall Street expected Tesla to deliver closer to 463,897, according to Bloomberg.
“The updated Model 3 ramp continued successfully in Q3 with higher total production and lower cost of goods sold over the quarter. Cybertruck production increased sequentially and achieved a positive gross margin for the first time,” Tesla said in its statement.
Tesla said it expects vehicle deliveries to experience “slight growth” in 2024. CEO Elon Musk added during the conference call that 20%-30% growth is possible next year.
Shares have fallen roughly 11% since Tesla revealed its robotaxi, dubbed the Cybercab, at its lavish “We, Robot” event on October 10 ahead of Tesla’s Q3 reveal on the Warner Bros. studio lot in Burbank, Calif.
Investors and analysts are getting more details and detailed test plans from Tesla’s “We the Robot” event at the Cyberspace, Tesla’s companion $30,000 EV, dubbed the Model 2.
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