Tesla posts shock $2.17 billion third-quarter profits, up 17.3% from a year ago

DETROIT — Tesla’s third-quarter earnings rose 17.3% compared with a year ago on stronger electric vehicle sales, and an optimistic CEO Elon Musk predicted 20% to 30% sales growth next year.

The powerful act changed the trajectory of the year for the Austin, Texas-based business, which had seen sales and profits decline in the first two quarters.

In its note to investors, Tesla predicted slight growth in vehicle deliveries this year, better than the 1.8 million delivered worldwide in 2023.

Tesla said Wednesday that it made $2.17 billion from July through September, more than the $1.85 billion profits it posted in the same period of 2023.

The profits came despite worth cuts and low-gain financing that helped boost sales of the business’s aging vehicle lineup during the quarter. It was Tesla’s first year-over-year quarterly profits boost of 2024, a year plagued by falling sales and prices.

turnover in the quarter rose 7.8% to $25.18 billion, falling short of Wall Street analysts who estimated it at $25.47 billion, according to FactSet. Tesla made an adjusted 72 cents per distribute, soundly beating analyst expectations of 59 cents.

Shares in Tesla Inc. soared nearly 12% in buying and selling after Wednesday’s closing bell.

On a conference call with analysts, Musk said the profits boost came despite a challenging surroundings for auto sales with still-high financing gain rates. “I ponder if you look at EV companies worldwide, to the best of my knowledge, no EV business is even profitable,” he said.

Musk qualified his prediction that Tesla would post 2025 vehicle sales growth of 20% to 30% by saying it could be changed by “negative external events.”

Earlier this month Tesla said it sold 462,890 vehicles from July through September, up 6.4% from a year ago. The sales numbers were better than analysts had expected.

The note said that Tesla is on track to commence production of recent vehicles, including more affordable models, in the first half of next year, something investors had been looking for. The recent vehicles will use parts from its current models and will be made on the same assembly lines as Tesla’s current model lineup, the note said.

The recent vehicles were not identified and the worth was nebulous. Musk has said in the history the business is working on a car that will expense about $25,000, but said Wednesday that a recent affordable vehicle would expense under $30,000 including government levy incentives.

Earlier this month, the business showed off a purpose-built two-seat robotaxi called “Cybercab” at a glitzy occurrence at a Hollywood movie studio. Musk said it would be in production before 2027 and expense around $25,000.

By using parts from existing models and the current manufacturing structure, Tesla won’t reach expense reductions that it previously expected using a recent manufacturing setup.

Tesla said it reduced the expense of goods per vehicle to its lowest level yet, about $35,100.

The business’s widely watched gross profits markup, the percentage of turnover it gets to keep after costs, rose to 19.8%, the highest in a year, but still smaller than the peak of 29.1% in the first quarter of 2022.

During the quarter, Tesla’s turnover from regulatory credits purchased by other automakers who can’t meet government emissions targets hit $739 million, the second highest quarter in business history.

Musk said Tesla’s “packed Self-Driving” structure is improving and would drive more safely than humans in the second quarter of next year. Despite the name, Teslas using “packed Self-Driving” cannot drive themselves, and human drivers must be ready to intervene at all times.

The business, he said, is offering an autonomous ride-hailing service to employees in the San Francisco Bay Area, but it currently has human safety drivers. It expects to commence a robotaxi service for the community in California and Texas next year, he said.

Musk also conceded that it may not be feasible to reach autonomous driving safety levels with older editions of “packed Self-Driving” hardware. If it can’t do that, Tesla will upgrade computers in the older cars for free, he said.

The self-driving claims arrive just five days after U.S. safety regulators opened an investigation into the structure’s cameras to view in low-visibility conditions such as sun glare, fog and airborne dust. The probe raised doubts about whether the structure will be ready to drive on its own next year.

The National Highway Traffic Safety Administration said in documents posted Friday that it opened the probe of 2.4 million Teslas after the business reported four crashes in low visibility conditions. In one, a woman who stopped to assist after a crash on an Arizona freeway was struck and killed by a Tesla.

Investigators will look into the ability of “packed Self-Driving” to “detect and respond appropriately to reduced roadway visibility conditions.”

Edward Jones analyst Jeff Windau said the profits update and conference call showed that Tesla is making money on software, a business with high profits margins.

Still, he has a “hold” rating on the distribute as the business moves toward robotics and autonomous vehicles. “They’ve got a lot of challenging goals out there,” he said.