$2.17 billion Q3 profit for Tesla, thanks to robust EV sales

DETROIT, Michigan: Tesla posted a surprising US$2.17 billion profit for the third quarter, up 17.3 percent from the same period last year, thanks to stronger electric vehicle sales.

This marks Tesla's first year-over-year profit increase in 2024, a year that had previously seen falling sales and prices. The automaker's revenue for the quarter rose 7.8 percent to $25.18 billion, although it fell short of Wall Street's expectations of $25.47 billion.

CEO Elon Musk expressed optimism during a call with analysts, predicting that Tesla could see vehicle sales growth of 20 percent to 30 percent next year. However, he noted that external factors could influence this projection. Tesla's shares surged on the stock market nearly 12 percent in after-hours trading following the announcement.

Musk acknowledged the challenging environment for auto sales due to high loan interest rates but highlighted Tesla's profitability compared to other electric vehicle (EV) companies. "No EV company is even profitable," Musk said, emphasizing Tesla's position in the market.

Tesla delivered 462,890 vehicles from July through September, a 6.4 percent increase from a year ago, surpassing analysts' expectations. The company also hinted at the release of more affordable models next year, using parts from its existing vehicles. While Musk had previously mentioned a $25,000 vehicle, he clarified that the price would be under $30,000, including government tax incentives.

During the quarter, Tesla reduced its cost per vehicle to $35,100, the lowest in its history, and reported a gross profit margin of 19.8 percent, up from previous quarters but below its peak in 2022. Revenue from regulatory credits purchased by automakers to meet emissions standards reached $739 million, the second-highest in company history.

Musk also provided updates on Tesla's "Full Self-Driving" system, claiming it could drive more safely than humans by mid-2024. The company is already testing an autonomous ride-hailing service with employees in California and Texas, and it plans to expand to the public next year.

However, these self-driving claims come from U.S. safety regulators investigating Tesla's cameras' ability to perform in low-visibility conditions. The probe follows incidents involving crashes under such conditions, raising concerns about the readiness of Tesla's self-driving technology.

Despite these challenges, Tesla's third-quarter solid performance reflects its resilience in a competitive and evolving market.