What caused TSLA's earnings to drop in Q3 2024?

Tesla's earnings dropped in Q3 2024 primarily due to increased competition and market dynamics:

1. Increased Competition: The electric vehicle (EV) market has become more competitive, with several other EV makers, especially in China, entering the market with discounted EVs. This increased competition put pressure on Tesla's pricing and margins.
2. Price Cuts and Incentives: To maintain demand and compete with cheaper EVs, Tesla introduced price cuts and incentives, which affected its gross margins. For instance, in the U.S., Tesla offered attractive financing options and reduced interest rates to boost sales. These measures, while helping to boost sales, came at the cost of margins.
3. Geopolitical Factors: Geopolitical tensions, such as the Red Sea conflicts, led to shipping delays, which likely impacted Tesla's supply chain and possibly affected deliveries and revenue recognition in the quarter.

In summary, Tesla's Q3 2024 earnings drop was primarily caused by increased competition, price cuts and incentives, and geopolitical factors.