Tesla sees 20%-30% vehicle growth next year
24/10/2024 6:08
Tesla CEO Elon Musk said on
Wednesday that he expects 20% to 30% vehicle growth next year,
sending the company's shares up 11% in post-market trading.
The company's quarterly report earlier in the day reassured
Wall Street that the EV maker was improving at its core business
of making and selling electric vehicles, reducing concerns about
when it could produce new models including a robotaxi.
The company handily beat third-quarter profit expectations
and investors welcomed a forecast for "slight growth" in auto
deliveries this year, surpassing the 1.8 million vehicles it
delivered in 2023.
Shares of Tesla surged 11% during the company's quarterly
conference call after the bell, adding about $70 billion in
stock market value. The stock dropped 2% during Wednesday's
trading session.
"Despite sustained macroeconomic headwinds and others
pulling back on EV investments, we remain focused on expanding
our vehicle and energy product lineup, reducing costs and making
critical investments in AI projects and production capacity,"
Tesla said in a statement.
Musk has been focused on transforming Tesla from a pure-play EV
maker to a leading force in autonomous driving and artificial
intelligence. But the company's robotaxi event earlier this
month left investors desiring more details on how the company
plans to do so.
Investors slammed shares the next day, punishing Tesla for the
conspicuous absence of a concrete business plan. This month
Tesla's stock has tumbled nearly 20% and Wednesday's report card
and forecast will offer shareholders some respite.
"The improving numbers across the board signal the company
may have finally found a nice sweet spot for the
pricing-versus-production-costs equation, which has been the
main issue for stock performance since last year," said Thomas
Monteiro, senior analyst at Investing.com. "The report also
diminishes the urgency for a cheaper model."
The EV giant said that the labor and material costs of
making vehicles, known as the cost of goods sold per vehicle,
dropped to its lowest level ever, about $35,100. Adjusted profit
of 72 cents per share in the third quarter beat an average
estimate of 58 cents.
Prices of raw materials used to make EV batteries have been
falling and Tesla has said its costs will decline as a result
this year, with the effect diminishing over time.
Its third-quarter profit margin from vehicle sales,
excluding regulatory credits, grew to 17.05% from 14.6% in the
prior three-month period, according to Reuters calculations.
Wall Street had expected the figure to be 14.9%, according
to 24 analysts polled by Visible Alpha.
INCENTIVES
Tesla has already delivered 1.29 million vehicles in the
first nine months of this year. It needs to hand over another
514,925 vehicles to beat last year's record.
The company said earlier this month that its
September-quarter deliveries grew by more than 6% on a
year-over-year basis, marking the first quarter of growth after
a decline in the January-June period.
On Wednesday, it said it recognized its second-highest
quarter of regulatory credit revenue. This metric was up 33%
year-over-year to $739 million, but down from $890 million in
the second quarter.
The company slashed prices last year, leading to a sharp
decline in profit margins. This spring, it shifted its strategy
to offering cheaper financing options and discounts that
analysts have said could slow its margin bleed over the coming
quarters.
"The fear going into results was that the huge incentives
effort to push volumes into the tough EV market would materially
dent margins – that doesn’t look the be the case," said Matt
Britzman, a senior equity analyst at Hargreaves Lansdown who
also personally owns Tesla shares.
Revenue for the July-September quarter was $25.18 billion,
compared with estimates of $25.37 billion, according to data
compiled by LSEG. It reported sales of $23.35 billion in the
corresponding quarter of 2023.
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