NEW YORK: Tesla shares surged Wednesday after the electric car maker reported a jump in profits, as increased auto sales and lower expenses offset the drag from a drop in vehicle prices.
The company, led by Elon Musk, reported third-quarter profits of US$2.2 billion, up 17% from the year-ago period on an 8% increase in revenues to US$25.2 billion.
The results broke a string of recent Tesla earnings that have seen the high-flying company report lower profits year-over-year as competition intensifies among automakers.
The outspoken Musk offered a bullish outlook on Tesla’s prospects, pointing to the strong results as evidence the company’s ambitious vision is being realised.
“Tesla is focused on building the future of energy, transport, robotics and AI, and this is a time when others are just focused on managing around near term trends,” Musk said on an earnings call.
Tesla had previously announced a 6% rise in vehicle sales.
A major question coming into Wednesday was the company’s ability to manage profitability after slashing vehicle prices over the last year or so in response to increased offerings from other companies in the electric vehicle industry.
Tesla’s results benefited from lower cost-per-vehicle, stemming from a dip in material costs and freight expenses, the company said.
Tesla said it expects “slight growth” in 2024 deliveries “despite ongoing macroeconomic conditions.”
In July, the company had said volume growth “may be notably lower” than in 2023, when deliveries surged 38%.
Musk expects a 20 to 30% rise in auto sales in 2025, when the company also expects to unveil autonomous ride-hailing in Texas and perhaps California.
The California venture is “contingent on regulatory approval,” Musk said, describing Texas’ regulatory climate as more straightforward.
Shares of Tesla jumped nearly 12% in after-hours trading.
Heading into Wednesday, the company’s shares were down about 14% for 2024, however. Besides earnings disappointments earlier in 2024, Musk has been under pressure to demonstrate new Tesla products to wow consumers.
A heavily-touted launch event earlier this month in Los Angeles showing off its autonomous robotaxi vehicles received mostly lackluster reviews.
Following Wednesday’s results, CFRA Research lifted its equity price target for Tesla, noting that “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.”
