DETROIT (AP) — Tesla’s third-quarter net income rose 17.3% compared with a year ago as its electric vehicle sales rose.
The Austin, Texas, company said Wednesday that it made $2.17 billion from July through September, more than the $1.85 billion profit it posted in the same period of 2023.
The profit came despite price cuts and low-interest financing that helped boost sales of the company’s aging vehicle lineup. It was the company’s first year-over-year quarterly profit increase of 2024.
Revenue in the quarter rose 7.8% to $25.18 billion, falling short of Wall Street analysts who estimated it at $25.47 billion, according to FactSet. Excluding one time items, Tesla made 72 cents per share, beating analyst expectations of 59 cents.
Shares in Tesla Inc. soared almost 9% in trading after Wednesday’s closing bell.
Earlier this month Tesla said it sold 462,890 vehicles from July through September, up 6.4% from a year ago and the first quarterly increase of 2024. The sales numbers were better than analysts had expected.
Even with sales drops in the first two quarters, Tesla said in its letter to shareholders that it expects slight growth in vehicle deliveries for the full year despite “ongoing macroeconomic conditions,” mainly high interest rates. Last year the company sold 1.8 million EVs worldwide.
The letter said that Tesla is on track to start production of new vehicles, including more affordable models, in the first half of next year, something investors had been looking for. The new vehicles will use parts from its current models and will be made on the same assembly lines as Tesla’s current model lineup, the letter said.
The new vehicles were not identified. CEO Elon Musk has said the company is working on a car that will cost about $25,000 as well as a purpose-built robotaxi.
By using parts from existing models and the current manufacturing system, Tesla won’t reach cost reductions that it previously expected. But the company said this method should enable more than 50% growth over 2023 production.
Tesla said it reduced the cost of goods per vehicle to its lowest level yet, about $35,100. “Despite sustained macroeconomic headwinds and others pulling back on EV investments, we remain focused on expanding our vehicle and energy product lineup, reducing costs and making critical investments in (artificial intelligence) projects and production capacity,” the letter said.
The company’s widely watched gross profit margin, the percentage of revenue it gets to keep after expenses, rose to 19.8%, the highest in a year, but still smaller than the peak of 29.1% in the first quarter of 2022.
During the quarter, Tesla’s revenue from regulatory credits purchased by other automakers who can’t meet government emissions targets hit $739 million, the second highest quarter in company history.
