Tesla records unexpected earnings report
The electric vehicle market's growth has noticeably slowed down in recent times, with modest projections before Tesla's latest financial report. However, the pioneer of electric vehicles seems to have a hidden trick up its sleeve.
American electric vehicle manufacturer Tesla managed to surpass anticipated profit margins, thanks in part to lessened material expenses. The margin reached 19.8% in the third quarter, the company revealed post-U.S. market closure. Analysts had anticipated only 17.3%, following a 18% in the second quarter. The adjusted earnings per share were 72 cents, substantially exceeding the forecast by 14 cents. The revenue for the July to September period was $25.18 billion, slightly missing estimates of $25.37 billion.
Tesla expects a slight increase in deliveries for the entire year compared to the previous one. Tesla's shares soared by 9.5% in post-market trading. "Despite the Challenging global economic conditions and other companies holding off on their electric vehicle investments, we remain committed to expanding our vehicle and energy product line, lowering costs, and making strategic investments in AI projects and production facilities," Tesla stated.
It was also highlighted that manufacturing and material costs for vehicle production have reached an all-time low of roughly $35,100. Tesla had previously disclosed that the costs of batteries' required materials had decreased.
To stimulate demand for its vehicles facing increased competition, Tesla has repeatedly slashed prices, which has placed pressure on profit margins. Although they are still more substantial than those of most conventional automakers, they have significantly reduced since the start of 2022. A few weeks ago, Tesla presented its robotaxi product, the Cybercab, and a self-driving van with 20 seats. This advances the development of autonomous technologies, including the humanoid robot Optimus.
Tesla's impressive financial report, revealing higher-than-expected profit margins, has reignited interest in the electric mobility sector. This surge in profits, attributed in part to lower material expenses, could potentially accelerate the electric mobility market's growth once again.
As Tesla continues to innovate, with the introduction of its Cybercab and self-driving van, the company's commitment to electric mobility remains unwavering, despite challenging global economic conditions and increased competition.
