By Akash Sriram, Abhirup Roy
(Reuters) -Tesla Chief Executive Elon Musk said he expects vehicle sales to grow 20% to 30% next year, aided by improvements in autonomous technology and the launch of more affordable models, sending the company’s shares up 12% in post-market trading on Wednesday.
The company earlier in the day forecast “slight growth” in auto deliveries this year, surpassing the 1.8 million vehicles it delivered in 2023. It also handily beat third-quarter profit expectations, though revenue was a slight miss.
Its quarterly report reassured Wall Street that the company was improving at its core business of making and selling electric vehicles, reducing concerns about when it could produce new models including a robotaxi.
The 12% surge in stock during the quarterly conference call after the bell added about $80 billion in stock market value. The stock dropped 2% during Wednesday’s trading session.
Tesla said it remained focused on expanding its vehicle lineup, cutting costs and making critical investments in AI projects and production capacity, despite uncertain demand and rivals pulling back on EV investments.
“Preparations remain underway for our offering of new vehicles – including more affordable models – which we will begin launching in the first half of 2025,” it said.
Musk has been focused on transforming Tesla from a pure-play EV maker to a leading force in autonomous driving and artificial intelligence. But the company’s robotaxi event earlier this month left investors desiring more details on how the company plans to do so.
Investors slammed shares the next day, punishing Tesla for the conspicuous absence of a concrete business plan.
On Wednesday, Musk said adoption of the company’s supervised autopilot software, known as Full Self-Driving, increased substantially after the robotaxi event. Tesla this month again offered FSD free for a month to its old customers, the secodn time this year.
“The improving numbers across the board signal the company may have finally found a nice sweet spot for the pricing-versus-production-costs equation, which has been the main issue for stock performance since last year,” said Thomas Monteiro, senior analyst at Investing.com. “The report also diminishes the urgency for a cheaper model.”
The EV giant said that the labor and material costs of making vehicles, known as the cost of goods sold per vehicle, dropped to its lowest level ever, about $35,100. Adjusted profit of 72 cents per share in the third quarter beat an average estimate of 58 cents.
