Tesla Q3 earnings: Tesla stock rises after company gives upbeat outlook

After a challenging first half of 2024, Tesla experienced a stronger third quarter. Recently reported figures show a 6 percent increase in electric vehicle deliveries year over year, although automotive sales remained stable. The company credits its success to a surge in regulatory credits and reduced manufacturing costs for its vehicles.

Tesla makes $2.2 billion in profit during Q3 2024

Automotive revenues rose by 2 percent to $20 billion in the third quarter, lagging behind delivery growth. In contrast, Tesla's battery and solar operations surged by 52 percent year over year, generating $2.4 billion. Additionally, services and other revenue streams contributed $2.8 billion, a 29 percent increase from Q3 2023.

A 6 percent cut in operating expenses significantly boosted results, alongside a 54 percent increase in operational income, reaching $2.7 billion. While some income stemmed from the Supercharger network, it primarily came from Tesla drivers, with only a few OEMs gaining access to the NACS plug. The company also reported strong parts sales and improved margins at its service centers.

Selling emissions credits to other automakers was almost as profitable in Q3 as it had been in the preceding three months. In total, Tesla brought in $739 million in this way.

Tesla stock soars as investors cheer Q3 earnings report

Tesla stock (TSLA) soared on Thursday as investors reacted positively to the mixed results from the third quarter earnings report.

The excitement stemmed from stronger-than-expected adjusted earnings per share and improved gross margins, along with the announcement that Tesla's more affordable electric vehicle is set for production next year. During the earnings call, CEO Elon Musk mentioned that the company anticipates volume growth of 20%-30% in the coming year.

By the end of the day, Tesla shares had jumped nearly 22%, significantly boosting the company’s market valuation and marking its best single-day performance since 2013.

Tesla reported revenue of $25.18 billion, which was lower than the $25.4 billion expected per Bloomberg consensus but higher than the $25.05 billion it reported in Q2 and also topped the $23.4 billion Tesla reported a year ago. Tesla posted adjusted earnings per share of $0.72 vs. $0.60 expected, on adjusted net income of $2.5 billion and free cash flow of $2.9 billion.

The key gross margin figure reached 19.8%, surpassing the anticipated 16.8%.

"We achieved strong results in Q3, with increases in vehicle deliveries both sequentially and year-over-year, resulting in record volumes for the quarter," the company noted in its earnings presentation. "We are preparing to launch new vehicles, including more affordable models, in the first half of 2025."

Earlier this month, Tesla reported third-quarter deliveries that fell slightly short of expectations, which caused a dip in the stock.