DETROIT (AP) — Tesla’s third-quarter net profit rose 17.3% from a year ago as sales of electric vehicles rose.
The Austin, Texas-based company said Wednesday that it earned $2.17 billion from July through September, up from the $1.85 billion profit it made in the same period in 2023.
The gains came despite price cuts and low-interest financing, which helped boost sales of the company’s aging car range. It was the company’s first quarterly annualized profit increase in 2024.
Revenue rose 7.8% to $25.18 billion in the quarter, below Wall Street analysts’ estimate of $25.47 billion, according to FactSet. Excluding one-time items, Tesla earned 72 cents per share, beating analyst expectations of 59 cents.
The shares of Tesla Inc. rose nearly 9% in trading after Wednesday’s closing bell.
Earlier this month, Tesla said it sold 462,890 vehicles from July through September, up 6.4% from a year ago and the first quarterly increase of 2024. The sales figures were better than analysts expected.
Even as sales fell in the first two quarters, Tesla said in its letter to shareholders that it expects modest growth in vehicle deliveries for the year despite “continued macroeconomic conditions,” mainly high interest rates. Last year, the company sold 1.8 million electric vehicles worldwide.
The letter said Tesla is on track to start producing new vehicles in the first half of next year, including more affordable models, something investors were looking for. The new vehicles will use parts from current models and will be made on the same assembly lines as Tesla’s current model lineup, 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, as well as a purpose-built robotaxi.
By using parts from existing models and the current production system, Tesla will not achieve the cost savings it previously expected. But the company said this method should enable growth of more than 50% over 2023 production.
Tesla said it has reduced the cost of goods per vehicle to the lowest level yet, about $35,100. “Despite ongoing macroeconomic headwinds and others pulling back on electric vehicle investments, we remain focused on expanding our range of vehicles and energy products, reducing costs and making critical investments in (artificial intelligence) projects and manufacturing capacity” , the letter said.
The company’s widely watched gross profit margin, the percentage of sales it is allowed to keep after expenses, rose to 19.8%, the highest in a year but still smaller than the 29.1% peak in the first quarter of 2022.
During the quarter, Tesla’s revenue from regulatory credits purchased by other automakers that cannot meet government emissions targets totaled $739 million, the second-highest quarter in the company’s history.
