Tesla’s (TSLA) stock surged nearly 11% in after-hours trading on Wednesday following the release of its third-quarter earnings, which exceeded Wall Street expectations. The electric vehicle (EV) maker delivered strong results in gross margins, earnings per share, and provided an optimistic production outlook for 2024, including plans for a more affordable EV model.
Tesla reported revenue of $25.18 billion, slightly below Bloomberg’s forecast of $25.4 billion but higher than the previous quarter’s $25.05 billion and the $23.40 billion recorded a year ago. The company posted an adjusted earnings per share (EPS) of $0.72, beating the expected $0.60, with adjusted net income reaching $2.5 billion and free cash flow totaling $2.9 billion. The closely monitored gross margin figure came in at 19.8%, far exceeding the anticipated 16.8%.
“We delivered strong results in Q3 with growth in vehicle deliveries both sequentially and year-on-year, resulting in record third-quarter volumes,” Tesla said in its earnings report. The company also confirmed that preparations for new, more affordable vehicles remain on track, with production expected to begin in the first half of 2025.
Tesla delivered 462,890 vehicles during the quarter, marking a 6.4% increase from Q2. Although the figure slightly missed Wall Street’s estimate of 463,897, it surpassed last year’s Q3 delivery of 435,059 vehicles. Tesla attributed the growth to the successful ramp-up of its refreshed Model 3 and improvements in production costs.
CEO Elon Musk expressed confidence in future growth, stating that Tesla’s vehicle deliveries could increase by 20-30% in 2024. However, he described this projection as a “best guess” during the earnings call.
Tesla also provided updates on its much-anticipated Cybertruck and robotaxi plans. The company said Cybertruck production had increased sequentially, achieving a positive gross margin for the first time. Musk noted that volume production of the robotaxi, known as the Cybercab, would begin in 2026, with plans to produce 2 million units annually. Tesla is currently testing robotaxi summoning with safety drivers in San Francisco.
In addition to its automotive division, Tesla’s Energy Generation and Storage business hit a record gross margin of 30.5% in Q3. The company expects this business segment to more than double its growth in 2024.
