(Bloomberg) — Elon Musk deftly increased Tesla’s market cap by $80 billion during the EV maker’s explosive quarter, marking its most profitable performance in more than a year.
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Third-quarter profits were boosted by sales of the Cybertruck, which turned a profit for the first time, an energy storage business and a surge in regulatory tax credits that other automakers pay to meet emissions standards. But the stock was also bought by expectations for the future. An ebullient Musk spent a long part of Wednesday’s conference call in a monologue, pledging to make Tesla the world’s most valuable company, starting with 20% to 30% growth in deliveries next year. . .
Musk, who is known for overlooking overly optimistic timelines, said Tesla aims to formally roll out ride-sharing in Texas and California next year. Musk’s comments, which require regulatory approval to run on public roads, sent shares of rivals Uber Technologies Inc. and Lyft Inc. down.
Musk also said production of the purpose-built robotaxis, called CyberCabs, will reach mass production in 2026, with a goal of at least 2 million units and “ultimately 4 million units.”
“Investors who were hoping for something today got better-than-expected returns and guidance to increase distribution numbers,” said Gene Munster, managing partner at Deepwater Asset Management. . “Long-term investors got a golden carrot.”
Musk also said that Tesla plans to launch an affordable model next year, but some investment suggests that Tesla will launch electric vehicles to compete with mass-market cars such as the Toyota Corolla. It betrayed the family’s long-standing expectations. Instead, Musk said the EV maker is focusing on its self-driving CyberCab, which he said will cost about $30,000. A typical $25,000 electric car is “pointless,” Musk said, noting that every Tesla produced will have self-driving capabilities.
The billionaire also touted what he plans to do with a potential job in the Trump administration if the former president returns to the White House during an earnings call for his only publicly traded company. Musk did not mention Trump’s name, but after Musk spent more than $75 million on his campaign, the Republican presidential candidate began to float as a possible Tesla CEO. The role of If appointed, Musk said he would create a path for federal approval of self-driving cars, rather than the patchwork of state regulations that currently exist.
Tesla shares soared 12% in after-market trading in New York and could erase much of the 14% stock price decline so far this year by Wednesday’s close.
“Slight growth”
The automaker predicted a “slight increase” in deliveries for the full year. Tesla will need a record fourth quarter to overcome the slump it experienced in the first half of the year.
Tesla said the growth was due to increased production of the Cybertruck, which it first delivered late last year. The company has not disclosed how many trucks it has sold, but the recall says the company has delivered at least 27,000 in the United States.
Morningstar analyst Seth Goldstein said Tesla is benefiting from increased production and stable prices. “Prices are stable and unit prices are coming down,” he said in an interview.
Tesla reported adjusted earnings of 72 cents per share in the third quarter, beating the average analyst estimate and missing expectations for the fourth consecutive quarter. Excluding regulatory credits, the company’s auto gross margin for the third quarter was 17.1%, beating analyst expectations and up from 14.6% in the previous quarter.
low expectations
Tesla’s strong earnings report comes less than two weeks after a glitzy event dedicated to the company’s new robotaxi, which disappointed many investors.
Garrett Nelson, an analyst at CFRA Research, said investors are setting a low bar for this quarter and have doubts that Tesla will be able to maintain its level of profitability.
“Expectations for the release have declined due to the fourth straight missed bottom line and Robotaxi Day, which left investors with more questions than answers,” Nelson wrote in a research note to clients. It was low.”
Tesla said the improved profitability was due to higher deliveries and strong sales of regulatory credits to other automakers that need help meeting emissions regulations. Revenue from regulatory credit reached $739 million in the three months ended Sept. 30, a record for the period but lower than $890 million in the second quarter.
The company also credited its energy business as a revenue driver. Tesla has already introduced more storage products so far this year than in all of 2023, including 6.9 gigawatt hours of storage this quarter.
The company is also expanding its charging network following high-profile layoffs of much of its Supercharger team earlier this year. The company added 2,800 new stalls in the third quarter, an increase of 22% year-on-year.
robotaxi
Tesla’s robotaxi vehicles, which have no controls such as pedals or steering wheels, use a new boxless manufacturing technique that differs from traditional production lines, where parts are assembled simultaneously in a dedicated area before being assembled at the end. the company said.
Musk said he expects self-driving versions of other vehicles as well, saying, “We don’t have to wait for robotaxis or cybercabs to experience full autonomy. I hope we can achieve that.”
When asked about delays in the development of the promised Roadster model, he also mentioned air taxis. The CEO said Tesla remains focused on mass-market vehicles first as part of its sustainability goals, but that the company is “close to finalizing the design” of the car. suggested. He added that Musk’s billionaire friend, venture capitalist Peter Thiel, has lamented the lack of flying cars, and that Musk tweeted that “we’ll see.”
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