Skip to content 
In a surprising turn of events, Tesla, the pioneer of electric vehicles, delivered a strong third-quarter earnings report that exceeded market expectations.
Elon Musk led EV giant, achieved its first year-over-year profit growth in 2024, marking a significant rebound from a series of disappointing financial performances.This transition comes as Tesla beat consensus earnings estimates for the first time in five quarters.
The market responded as Tesla shares surged 12% in after-hours trading, potentially adding approximately $80 billion to the company’s market capitalization.
The Numbers Tell the Story
- Earnings per Share (EPS): Tesla reported an adjusted EPS of 72 cents, beating analysts’ expectations of 58 cents.
- Revenue: The company generated $25.18 billion, slightly below the anticipated $25.37 billion, but still an 8% increase from $23.35 billion in the same quarter last year.
- Net Income: Net income rose to approximately $2.17 billion, up from $1.85 billion a year ago.
Source: Yahoo Finance
A significant part of this profit came from $739 million earned through automotive regulatory credits. These credits allow manufacturers to meet emissions standards, giving Tesla an advantage since it exclusively produces electric vehicles.
Diversifying Revenue Streams
While Tesla’s core automotive revenue grew only a 2% increase to $20 billion, other segments are growing at an exponential rate:
- Energy Generation and Storage: Revenue surged by 52% to $2.38 billion.
- Services Revenue: This segment climbed 29% to $2.79 billion.
Source: Yahoo Finance
Musk’s Vision for the Future
During the earnings call, CEO Elon Musk expressed optimism for the upcoming year, forecasting vehicle sales growth between 20% and 30%.
During the earnings call, CEO Elon Musk shared an optimistic outlook for the future. He forecasts vehicle sales to grow between 20% and 30% next year, boosting confidence among investors. Despite the revenue miss, the fact that the company is set to achieve “slight growth” in deliveries this year is a positive takeaway.
Musk highlighted ongoing efforts to reduce production costs, enhancing Tesla’s already industry-leading margins. He also announced plans to introduce driverless vehicles for paid rides next year, contingent upon regulatory approvals in key markets, including California and Texas.
Musk announced that the Cybercab is set to reach volume production by 2026, with an ambitious target of 2 million units annually. Additionally, Tesla is testing robotaxi summoning and driving features in San Francisco, with safety drivers behind the wheel.
However, the response to the anticipated robotaxi hasn’t been positive, highlighting the challenges Tesla faces in meeting investor expectations. After the event, Tesla’s share tanked 10% after the event. Yet, Musk remains confident, asserting that no other EV company matches Tesla’s profitability.
Tesla’s Automotive Margins Rebound
Investors have been closely monitoring Tesla’s automotive margins. Earlier this year, the company’s profit margins fell to multiyear lows, largely due to challenges in the automotive segment. However, in a noteworthy turnaround, Tesla reported an increase in its profit margin from vehicle sales—excluding regulatory credits—to 17.05%, up from 14.6% in the previous quarter, surpassing Wall Street’s expectations of 14.9%. Additionally, Tesla’s cost of goods sold per vehicle has decreased to an all-time low of approximately $35,100. As raw material prices for EV batteries continue to decline, the company anticipates further cost reductions this year, though the impact of these savings may diminish over time.
Cybertruck: A Bright Spot
Tesla’s Cybertruck has been performing surprisingly well. It became the third-best-selling fully electric vehicle in the U.S., following the Model 3 and Model Y. During Q3, Tesla sold over 16,000 Cybertrucks, signaling a recovery from earlier quality issues. Notably, the Cybertruck achieved a positive gross margin for the first time, reinforcing confidence in its future success.
The Full Self-Driving (FSD) system also contributed significantly, generating $326 million in revenue this quarter, particularly thanks to its integration with the Cybertruck and its new “Actually Smart Summon” feature.
Record Growth in Energy Business
Tesla’s Energy Generation and Storage segment achieved a record gross margin of 30.5% in Q3. The revenue from the energy generation business surged 52% in the quarter.The company expects this business to double year-over-year in 2024, underscoring its commitment to diversifying its business.
Source: Yahoo Finance
Navigating Competitive Waters
Despite the positive earnings, Tesla’s vehicle deliveries totaled 462,890, marking a 6% year-over-year increase but falling short of expectations. This miss is a reminder of the intensifying competition Tesla faces, particularly from companies like BYD and Geely in China, as well as traditional automakers like Ford and GM ramping up their EV offerings.
Nevertheless, Tesla maintains its expectation for slight growth in vehicle deliveries for 2024 and plans to introduce more affordable models in the first half of 2025, aiming to broaden its market reach and fend off competition.
Conclusion: The Road Ahead
Tesla’s third-quarter earnings reveal a company in recovery, with strong financial performance and ambitious plans for the future. While challenges remain—ranging from fierce competition to evolving market dynamics—the company’s ability to innovate and adapt will be pivotal.
As Tesla continues to navigate this complex landscape, all eyes will be on how it capitalizes on its recent successes and addresses the challenges that lie ahead. The next few quarters will be critical for Tesla, as it seeks to maintain its position as a leader in the electric vehicle market.
In summary, while Tesla’s recent earnings report showcases resilience and growth potential, the journey forward is fraught with challenges. How Tesla adapts to these market dynamics will determine its future trajectory.
Disclaimer: This article draws from sources such as Financial Times, Bloomberg,and other reputed media houses. Please note, this blog post is intended for general educational purposes only and does not serve as an offer, recommendation, or solicitation to buy or sell any securities. It may contain forward-looking statements, and actual outcomes can vary due to numerous factors. Past performance of any security does not guarantee future results.This blog is for informational purposes only. Neither the information contained herein, nor any opinion expressed, should be construed or deemed to be construed as solicitation or as offering advice for the purposes of the purchase or sale of any security, investment, or derivatives.The information and opinions contained in the report were considered by VF Securities, Inc.to be valid when published. Any person placing reliance on the blog does so entirely at his or her own risk, and does not accept any liability as a result.Securities markets may be subject to rapid and unexpected price movements, and past performance is not necessarily an indication of future performance. Investors must undertake independent analysis with their own legal, tax, and financial advisors and reach their own conclusions regarding investment in securities markets.
