The world's largest electric vehicle company, Tesla, posted third-quarter net profits that exceeded market expectations. There are also expectations that Tesla will overcome the 'electric vehicle chasm (temporary demand slowdown)' starting in the second half of the year.
According to the earnings report released by Tesla on the 23rd (local time), third-quarter (July-September) revenue was $25.182 billion, and earnings per share (EPS) were $0.72. Revenue fell short of Wall Street's estimate ($25.37 billion), but EPS exceeded expectations ($0.58). The GAAP net income was $2.167 billion, a 17% increase compared to the same period last year ($1.853 billion), surpassing analysts' forecasted growth rate of 14.9%.
Tesla's net income had been declining since last year due to discount competition with Chinese electric vehicle manufacturers. However, due to a decrease in cost of goods sold, net income did not decline as much as expected. Tesla stated that labor and material costs for automobile manufacturing dropped to an all-time low of about $35,100. The significant drop in lithium prices, which is used to make electric vehicle batteries, is considered to have had a major impact.
Tesla expects deliveries to slightly increase this year compared to the previous year as electric vehicle demand recovers. Earlier this month, Tesla announced that third-quarter deliveries reached 462,890 units, an increase of more than 6% compared to the same period last year. This is significant as it marks the first growth after deliveries declined in the first and second quarters.
Additionally, Tesla plans to launch a low-cost electric vehicle in the first half of next year. Investors have been interested in when Tesla will release a low-cost electric vehicle that can drive short-term profits.
Tesla is a company attracting attention for investing in future profit drivers such as artificial intelligence (AI), autonomous driving, and robotics technology. Tesla announced plans to spend more than $10 billion in capital expenditures this year to expand data centers and improve software that will be key to the future of autonomous driving. In a statement, Tesla emphasized, "Despite ongoing macroeconomic headwinds and setbacks in electric vehicle investments, Tesla continues to focus on expanding its vehicle and energy product lineup, cost reduction, AI projects, and significant investments in production capacity."
Tesla's stock closed at $213.65, down 1.98% from the previous trading day in regular trading, but showed a rise of over 8% in after-hours trading following the earnings announcement.
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