NEW YORK, Oct 24 — Tesla shares surged Wednesday after reporting a jump in profits as increased auto sales and lower expenses offset the drag from a drop in vehicle prices.
Elon Musk’s electric vehicle company reported third-quarter profits of US$2.2 billion, up 17 percent from the year-ago period on an eight-percent increase in revenues to US$25.2 billion.
The results broke a string of recent Tesla earnings that have seen the high-flying company report lower profits year-over-year as competition intensifies among automakers.
“We delivered strong results in Q3 with growth in vehicle deliveries both sequentially and year-on-year, resulting in record third-quarter volumes,” Tesla said in a news release.
Tesla had previously announced a six-percent rise in vehicle sales.
A major question coming into Wednesday was its ability to manage profitability after slashing vehicle prices over the last year or so in response to increased offerings from other companies in the electric vehicle (EV) industry.
Tesla’s results benefited from lower cost per vehicle stemming from a dip in material costs and freight expenses, Tesla said.
Tesla said it expects “slight growth” in 2024 deliveries “despite ongoing macroeconomic conditions.”
In July, the company said volume growth “may be notably lower” than in 2023, when deliveries surged 38 percent.
Shares of Tesla jumped 8.3 percent in after-hours trading.
The company’s shares were down about 14 percent for 2024, however. Besides earnings disappointments earlier in 2024, Musk has been under pressure to demonstrate new Tesla products to wow consumers.
A heavily-touted launch event earlier this month in Los Angeles behind the autonomous robotaxi vehicles received mostly lackluster reviews.
While Deutsche Bank analysts were impressed with Tesla’s improving “full self-driving” technology after a demonstration, they were “underwhelmed” with the limited detail surrounding the Robotaxi itself, according to an October 11 note.
The Deutsche Bank note also expressed disappointment at the lack of updates on a new “Model 2” vehicle, an EV at a lower price-point to compete with new offerings from General Motors and other legacy companies.
Boosting Trump
Musk has also stood out among major corporate figures in his activism in the 2024 presidential election on behalf of Republican candidate Donald Trump. Musk’s efforts have gone well beyond the practice of contributing funds to preferred candidates.
The billionaire has appeared on the stump with Trump, including at a rally in Butler, Pennsylvania earlier this month in which Musk donning a black “Make America Great Again” hat – was photographed jumping for joy in support of the ex-president.
More recently, Musk has unveiled a lottery to give US$1 million a day to registered voters in swing states in a gambit that some experts suspect breaches US campaign laws.
Musk’s support of Trump also poses questions as to its effect on the Tesla brand, given the polarized state of the US electorate.
Democratic Vice Presidential candidate Tim Walz took a shot at Musk on Tuesday night during a campaign rally in Wisconsin, noting that Trump could appoint Musk to a post that influences the regulation of the billionaire’s business.
Musk could “spend billions to make more than US$10 billion on the back-end,” Walz said.
“So in other words, Donald Trump, in front of the eyes of the American public is promising corruption,” Walz added. “I don’t believe (Trump) keeps many promises but he’ll keep that one.”
Musk shot back at Walz on his X platform, posting to the former Twitter a picture of a lost-looking Walz captioned, “Who Am I... Why am I here”? — AFP
