(Bloomberg) – Tesla Inc. beat Wall Street profit expectations in the third quarter and forecast a slight increase in deliveries for the current year, due to a recovery in demand for its electric vehicles.
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The company on Wednesday reported adjusted earnings of 72 cents per share for the quarter, above the average analyst estimate and marking a record four straight quarters in which the metric missed expectations. It reiterated plans to start producing more affordable models in the first half of 2025 and said it expects 50% growth next year over 2023 production volumes.
The company’s shares rose as much as 12% in postmarket trading on Wednesday, after closing regular trading down 14% for the year.
Tesla said it expects another strong quarter in deliveries after a record third quarter and anticipates higher volumes for the full year. It won’t be easy, given the slowdown in deliveries Tesla recorded in the first half of the year, and the automaker will need to significantly increase sales in the fourth quarter to surpass – or even match – 2023 levels.
Chief Executive Officer Elon Musk said he expects continued growth next year and gave a “rough estimate” of delivery volumes. “I think the vehicle will grow 20 to 30% next year despite negative external events,” he said on a conference call with analysts.
Tesla said its Cybertruck, which began shipping late last year, has become profitable for the first time, thanks in part to production increases for the futuristic pickup. The company’s automotive gross margin in the third quarter, excluding regulatory credits, was 17.1%, up from the previous quarter’s 14.6%.
Seth Goldstein, an analyst at Morningstar, said Tesla benefits from higher volumes and more stable prices. “Prices are stabilizing and unit costs are falling,” he said in an interview.
Low expectations
Garrett Nelson, an analyst at CFRA Research, said investors had set the bar low for the quarter and questioned whether Tesla can maintain that level of profitability.
“Expectations were low leading up to release after four straight failures and a Robotaxi day that left investors with more questions than answers,” Nelson said in a research note to clients.
