Tesla’s third-quarter net income rose 17.3% from a year earlier as quarterly sales of its electric vehicles rose for the first time this year.
The Austin, Texas, company said Wednesday it made $2.17 billion from July to September, up from the $1.85 billion profit it posted in the same period in 2023.
The gain came despite price cuts and low-interest financing that helped boost sales of Tesla’s older lineup of vehicles. It was the company’s first quarterly profit increase year-over-year in 2024, a year plagued by falling sales and prices.
Revenue in the quarter rose 7.8% to $25.18 billion, falling short of Wall Street analysts who had estimated it at $25.47 billion, according to FactSet. Excluding one-time items, Tesla earned 72 cents per share, beating analysts’ expectations of 59 cents.
Tesla shares rose more than 9% in trading after the closing bell on Wednesday.
Earlier this month Tesla said it sold 462,890 vehicles from July to September, up 6.4% from a year earlier. Sales figures were better than analysts expected.
Even with sales falling in the first two quarters, Tesla said in its letter to shareholders that it expects slight growth in vehicle shipments for the full year, despite “persistent macroeconomic conditions,” mainly high interest rates. Last year the company sold 1.8 million EVs worldwide.
The letter said Tesla is on track to begin production of new vehicles, including more affordable models, in the first half of next year, something investors had been calling for. The new vehicles will use parts from its current models and will be made on the same assembly lines as Tesla’s current model, the letter said.
The new vehicles were not identified. CEO Elon Musk has said the company is working on a car that will cost around $25,000. Earlier this month, the company showed off a purpose-built two-seater robotaxis at a glitzy event at a Hollywood movie studio. Musk said it will be in production before 2027.
By using parts from existing models and the current production system, Tesla will not achieve the cost reductions it previously expected. But the company said this method should enable more than a 50% increase in production by 2023.
Tesla said it lowered the freight cost per vehicle to its lowest level yet, about $35,100. “Despite sustained macroeconomic headwinds and other drags on EV investment, we remain focused on expanding our vehicle and energy product line, reducing costs and making critical investments in projects (artificial intelligence) and manufacturing capacity “, the letter said.
The company’s widely watched gross profit margin, the percentage of revenue it must keep after expenses, rose to 19.8%, the highest in a year, but still less than the peak of 29.1% in the first quarter of 2022 .
During the quarter, Tesla’s earnings from regulatory credits it bought from other automakers that can’t meet government emissions targets totaled $739 million, the second-highest quarter in the company’s history.
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