Tesla Projects Modest Growth in 2024 Deliveries as Shares Surge 7% on Strong Q3 Profits

Tesla announced a slight growth projection for 2024 vehicle deliveries following stronger-than-expected third-quarter profits, driven by reduced raw material costs. The news boosted Tesla’s shares by 7% after hours, increasing the company’s market value by nearly $50 billion.

Tesla Achieves Record Q3 Vehicle Deliveries, Profit Margins Surge to 17.05%, Exceeding Expectations

As disclosed on October 23, Tesla anticipates a slight increase in vehicle deliveries this year. The company's third-quarter profit margin was also higher than expected due to the reduction in basic material costs. According to Reuters, this news induced a 7% increase in shares after hours.

Additionally, profits exceeded projections by a considerable margin.

"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 said.

The third quarter saw record volumes due to the company's growth in vehicle deliveries. Additionally, it acknowledged that its regulatory credit revenues were the second highest this quarter.

According to Reuters calculations, the company's third-quarter profit margin from vehicle sales, which excludes regulatory credits, increased from 14.6% in the previous three-month period to 17.05%.

Wall Street had anticipated a 14.9% figure, as per 24 analysts surveyed by Visible Alpha.

The cost of goods sold per vehicle, which is the sum of the labor and material costs associated with the production of a car, has reached a significant milestone. At approximately $ 35,100, this is the lowest point in history, a testament to our commitment to efficiency and cost management, according to Tesla.

The cost of raw materials used to manufacture electric vehicle batteries has decreased, and Tesla has announced that its expenses will decrease this year. However, the impact of this decrease will gradually diminish.

The 7% increase in Tesla stock after hours raised the stock market value by nearly $50 billion. On October 23, during trading session, the stock experienced a 2% decline.

Tesla's Q3 Deliveries Rise 6% YoY, New Autonomous Products Unveiled Amid Strong Profit Margins

Tesla said earlier this month that its September-quarter deliveries grew by more than 6% year over year, marking the first quarter of growth after a decline in January-June.

The company's price reductions last year significantly reduced profit margins. This spring, it implemented a strategy that prioritized the provision of discounts and financing options at a reduced cost. Analysts have predicted that this shift could mitigate its margin erosion in the forthcoming quarters.

To expedite the advancement of its autonomous technologies, including the Optimus humanoid robot, Tesla unveiled its robotaxi product, Cybercab, and a 20-seater self-driving van earlier this month.

According to data compiled by LSEG, revenue for the July-September quarter was $25.18 billion, which was lower than the estimated $25.37 billion. In the same quarter of 2023, it reported sales of $23.35 billion.

In the third quarter, adjusted profit was 72 cents per share, surpassing the average estimate of 58 cents.

According to 21 analysts surveyed by LSEG, the company's profit margin of 19.8% during the July-September period exceeded the consensus estimate of 17.3%. This is in contrast to the 18% reported in the second quarter.