Tesla shares reacted higher to the surprisingly strong results and forecast growth of up to 30% in vehicle sales next year.
Third-quarter numbers were boosted by Cybertruck’s turnaround, which turned a profit for the first time. Lower material costs, a booming energy business and sales of regulatory credits to automakers that need help meeting emissions limits also contributed to Tesla’s best quarterly result in more than a year.
The company’s CEO, Elon Musk, offered an optimistic outlook for 2025, citing the launch of more affordable models that Tesla has not yet identified. “Something like 20% to 30% growth next year is my best guess,” he said in a webcast.
Tesla shares rose almost 15% at the start of trading on Thursday (24). The shares had fallen 14% this year until the close of Wednesday (23) and have shown declines since Musk revealed prototypes of autonomous taxis and vans.
Musk is betting Tesla’s future on autonomy, having scrapped plans for a new vehicle that would be cheaper than the Model 3 sedan. Reporting an increase in profitability and optimism about next year, the CEO assuaged concerns that Tesla’s core business Tesla will continue to fall as it prioritizes the pursuit of autonomous driving technology.
Tesla reported adjusted earnings of 72 cents per share, beating analyst estimates for the first time in five quarters. The company’s automotive gross margin, excluding regulatory credits, rose to 17.1%, also exceeding projections.
“Investors who wanted something today got better-than-expected profit and forecast growth in deliveries,” said Gene Munster, managing partner at investment firm Deepwater Asset Management.
Estimates
Garrett Nelson, an analyst at CFRA Research, said investors had set a low expectation for this quarter and questioned whether Tesla would be able to sustain its level of profitability.
“Expectations were low heading into the announcement following four consecutive financial results disappointments and a Robotaxi Day that left investors with more questions than answers,” Nelson said in a note to clients.
Trump
Musk spent a brief portion of Wednesday’s webcast discussing what he could do in a second Trump administration.
After calling for a federal approval process for autonomous vehicles, Tesla’s CEO said he would “try to make that happen” if he were appointed to a government role he and Donald Trump first discussed in August. The billionaire supported the Republican candidate by pouring $75 million into a super political action committee.
