Electric vehicle maker Tesla (NASDAQ:) has announced that it expects vehicle deliveries to increase slightly in 2024. The announcement coincided with the release of the company’s third-quarter results, which revealed better-than-expected profit margins due to lower raw sales. Material cost. Tesla shares rose 7% in after-hours trading on the news.
The company said on Wednesday it remains committed to expanding its product range, cutting costs and investing in artificial intelligence (AI) and production capacity projects, despite economic challenges and a trend by other manufacturers to cut investment in electric vehicles (EVs). He announced that he would go. . Tesla’s statement emphasized the company’s resilience against a backdrop of persistent macroeconomic headwinds.
Tesla reported record deliveries and second-highest revenue from regulatory credits in the third quarter. Excluding these credits, the company’s margin on vehicle sales increased to 17.05% from 14.6% in the prior quarter. This number was significantly higher than the 14.9% margin expected by analysts surveyed by Visible Alpha.
Tesla also highlighted that its cost of goods sold per vehicle has been significantly reduced, reaching an all-time low of approximately $35,100. Declining prices of raw materials used in EV batteries have been cited as a factor in cost reductions, but it has been pointed out that the effects of these cost reductions will diminish over time.
Despite falling 2% during regular trading on Wednesday, the post-close stock price boost added nearly $50 billion to Tesla’s market capitalization. In early October, Tesla reported that deliveries in the September quarter rose more than 6% from a year earlier, a recovery from a decline in the first half of the year.
Tesla implemented strategic price cuts last year, leading to a significant drop in profit margins. However, the company has opted to offer more affordable financing options and discounts this year, and analysts believe this strategy could help stabilize profit margins in the future.
Additionally, Tesla recently launched new products as part of its self-driving technology advancements, including the CyberCab robotaxi and a 20-passenger self-driving van. This also includes the Optimus humanoid robot.
Tesla’s third-quarter revenue was $25.18 billion, slightly below LSEG’s estimate of $25.37 billion, but up from $23.35 billion in the same period in 2023. Adjusted earnings per share for the quarter were 72 cents, beating consensus estimates of 58 cents. cent. The company’s overall profit margin reached 19.8% in the July-September period, beating LSEG analysts’ expectations of 17.3% and improving from 18% in the second quarter.
Reuters contributed to this article.
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