Tesla's Stock Skyrockets In After-hours Trading, Thanks To Its Strong Q3 Earnings and Optimistic Outlook
3min read Tesla just released its earnings for the third quarter. Although its revenue was slightly below expectations, the profit data surprised the market - boosted by this, Tesla's stock price soared by more than 12% in after-hours trading, potentially returning to its annual high of $240 on Thursday.
In terms of specific data, Tesla's total revenue in the third quarter was $25.182 billion, a year-on-year increase of more than 7.8%; net income increased from $1.85 billion a year ago to $2.17 billion, which translates to 62 cents per share when diluted. Under non-GAAP standards, net income reached $2.505 billion, a year-on-year increase of 8.1%, which is a significant improvement compared to the 42% year-on-year decline in the second quarter, translating to $0.72 per share when diluted.
Looking at the business breakdown, Tesla's vehicle-related revenue grew by 2% from $19.63 billion a year ago to $20 billion, roughly in line with the end of 2022. Energy generation and storage revenue continued its rapid growth from previous quarters—soaring 52% to $2.38 billion, while service and other revenue, including non-warranty repairs of Tesla vehicles, grew by 29%, contributing $2.79 billion in revenue.
Additionally, the company recorded $739 million in automotive regulatory credit revenue. In the United States, automakers need to obtain a certain number of regulatory credits each year. If they fail to meet their targets, they can purchase credits from companies with excess credits, like Tesla, which only produces electric vehicles.
Tesla also gave the market an exciting signal in terms of delivery volume: As of October 22, it has produced 7 million vehicles, and its latest product, the Cybertruck, has become the third best-selling all-electric vehicle in the United States, after the Model 3 and Model Y. Moreover, Tesla mentioned in the financial report that the Cybertruck achieved a positive gross margin for the first time in the quarter. However, the most important thing is Tesla's expectation for the future: In the subsequent conference call, CEO Musk stated that, in his rough estimate, even with external negative events, the full-year delivery volume for 2024 will slightly increase compared to the previous year, which means that Tesla's delivery volume in the fourth quarter of this year is likely to break the highest single-quarter record set in the third quarter. Next year, Tesla's delivery volume still has room for growth of 20% to 30%.
Musk Confirms Price Range for Affordable Tesla
Notably, regarding the long-awaited affordable Tesla model, Musk also provided a price range for the first time during the earnings call—The CEO stated that the future affordable Tesla electric vehicle will be launched with a price tag of less than $30,000, and the company plans to start producing this affordable model in the first half of 2025.
During the call, Tesla's Chief Financial Officer (CFO) Vaibhav Taneja pointed out that the historically low unit vehicle manufacturing cost in the third quarter, including raw materials, freight, and tariff expenses, was one of the key factors in Tesla's profit growth in the last quarter. In the future, Tesla promises to continue focusing on reducing vehicle production costs.
Cybercab to Launch Next Year?
In addition to revenue information, Tesla also announced the latest progress in autonomous driving to the outside world: The company released version 12.5 of FSD (Supervised) v 12.5 in the third quarter. Although this version still requires supervision from the driver, it further enhances the safety and comfort during assisted driving. At the same time, Tesla released the Actually Smart Summon (ASS) feature, which allows owners to summon their vehicles in the parking lot to drive autonomously to their side. It also released FSD (Supervised) for Cybertruck users, achieving end-to-end neural network deployment on highways for the first time.
Tesla pointed out that these functional improvements stem from an increase in data and training computing—In the quarter, Tesla deployed a cluster of 29,000 NVIDIA H100 chips at the Gigafactory in Texas ahead of schedule—and the company plans to continue expanding these options in the fourth quarter. Tesla emphasized that the company's AI training computing volume increased by more than 75% in the third quarter, and by the end of October, the company is expected to have a capacity of 50,000 H100 chips, further enhancing the training volume.
In addition, Musk also stated during the call that Tesla has developed a ride-hailing app and is expected to launch a Cybercab-related ride-hailing service for the public in Texas and California next year.
According to him, Tesla has already started testing, and some Tesla employees in California are already using this app. You can request a ride and it'll take you anywhere in the Bay Area, Musk said, We do have a safety driver for now.
However, according to the list of licenses posted on the California Public Utilities Commission website, Tesla currently does not have a license to operate a commercial transportation network company or ride-hailing service in California.
