Tesla's (TSLA.US) Q3 earnings report "return of the strong" after FSD transformation, can it continue to open up imagination space
1min read Tesla (TSLA.US) released its Q3 earnings after the US market closed on Wednesday, leaving investors impressed with its profitability. The data showed that the gross margin of the automotive business, excluding "selling carbon" revenue, rose to 17.1%, easily topping the market's expectation of 15.1%; the operating margin was 10.8%, an improvement from the previous quarter's 6.3% and higher than the previous year's 7.6%. Tesla CEO Elon Musk said on the earnings call that the company would produce more affordable models in the first half of 2025. He expects the car production to grow 20% to 30% by 2025 and expects a significant expansion of Cybertruck production in 2026. In the autonomous driving business, Tesla believes that the driving safety of FSD will exceed human driving levels by the second quarter of 2025. The ride-hailing service is expected to launch in Texas and California next year. When asked if Tesla would launch a $25,000 affordable car, Musk said that the future of Tesla is autonomous driving. This means that Model2 will not be like a regular car and may not have a steering wheel. Garrett Nelson, an analyst at CFRA, reminded investors that expectations for the Q3 earnings were low after four consecutive quarters of earnings misses and the disappointment of Robotaxi Day. Nelson said the key question was the sustainability of Tesla's Q3 gross margin. He also believed that the consensus expectation of nearly 80% growth in EPS from 2024 to 2026 was unrealistic. Wedbush Securities was as optimistic as usual. Analyst Dan Ives said that with the price cuts fully in the past, Tesla showed its ability to expand its margin as the company continues to transform into AI/FSD in the next few years. Victor Dergunov, head of investment team at The Financial Prophet, said the most important takeaway was that the improvement in Tesla's profitability exceeded expectations, which was the main focus of the report. In addition, the solid EPS performance means that Tesla's profitability may continue to exceed expectations. After the earnings release, Tesla's stock rose 12.1% after hours to $239.50.
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𝐈 𝐡𝐚𝐯𝐞 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐜𝐞 𝐢𝐧 𝐡𝐞𝐫 𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐭𝐨 𝐩𝐫𝐨𝐯𝐢𝐝𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜, 𝐚𝐧𝐝 𝐩𝐫𝐮𝐝𝐞𝐧𝐭 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐚𝐝𝐯𝐢𝐜𝐞. 𝐆𝐞𝐭 𝐭𝐡𝐞 𝐞𝐝𝐠𝐞 𝐢𝐧 𝐜𝐫𝐲𝐩𝐭𝐨 𝐭𝐫𝐚𝐝𝐢𝐧𝐠 𝐜𝐡𝐚𝐭 👥𝐅𝐚𝐜𝐞𝐛𝐨𝐨𝐤 𝐩𝐚𝐠𝐞, 𝐂𝐚𝐭𝐡𝐞𝐫𝐢𝐧𝐞 𝐄. 𝐑𝐮𝐬𝐬𝐞𝐥𝐥 𝐓𝐫𝐚𝐝𝐢𝐧𝐠~𝐯𝐢𝐞𝐰 𝐒𝐡𝐞 𝐜𝐨𝐧𝐬𝐢𝐬𝐭𝐞𝐧𝐭𝐥𝐲 𝐝𝐞𝐦𝐨𝐧𝐬𝐭𝐫𝐚𝐭𝐞 𝐩𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥𝐢𝐬𝐦, 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐜𝐲, 𝐚𝐧𝐝 𝐠𝐞𝐧𝐮𝐢𝐧𝐞 𝐜𝐚𝐫𝐞 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐩𝐞𝐨𝐩𝐥𝐞 𝐬𝐡𝐞 𝐰𝐨𝐫𝐤 𝐰𝐢𝐭𝐡. 𝐈 𝐰𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐡𝐞𝐬𝐢𝐭𝐚𝐭𝐞 𝐭𝐨 𝐫𝐞𝐜𝐨𝐦𝐦𝐞𝐧𝐝 𝐂𝐚𝐭𝐡𝐞𝐫𝐢𝐧𝐞 𝐄. 𝐑𝐮𝐬𝐬𝐞𝐥𝐥 𝐭𝐨 𝐚𝐧𝐲𝐨𝐧𝐞 𝐬𝐞𝐞𝐤𝐢𝐧𝐠 𝐞𝐱𝐩𝐞𝐫𝐭 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐩𝐞𝐚𝐜𝐞 𝐨𝐟 𝐦𝐢𝐧𝐝 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧𝐬. 🆙
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