“To continue to accelerate the world’s transition to sustainable energy, we need to make electric cars affordable for everyone, including making the total cost of ownership per mile competitive with all modes of transportation,” the company said. “Preparations are still underway for our range of new vehicles – including more affordable models – which we will begin launching in the first half of 2025.”
“Preparations are still underway for our range of new vehicles”
Earlier this year, Tesla abandoned its plan to build a more affordable “Model 2” vehicle that was rumored to cost around $25,000. But after a pushback from investors, Tesla CEO Elon Musk committed to it — though it’s still unclear whether it will be an all-new vehicle or just a more affordable Model 3. Musk said the two-seat Cybercab would be available for purchase for $30,000 starting in 2026.
The company said it earned $2.2 billion in net income on $25.2 billion in revenue. That represents a 7 percent year-over-year increase compared to $23.4 billion in revenue in Q3 2023, and a 17 percent increase in net income, somewhat exceeding expectations. Analyst consensus predicted Tesla’s quarterly profit would fall 9 percent in Q3, while revenue would rise 9 percent, according to FactSet.
The income the company receives from buying regulatory credits from other companies continued to perform well. Tesla said it was its “second-highest quarter of regulatory credit revenue as other OEMs still lag behind in meeting emissions requirements.”
The company’s gross margins were again in the spotlight as bullish investors hoped to see improvement after months of steady decline. Heavy price cuts and cooling demand, as well as cheaper financing, have pushed the company’s once-admired margins to their lowest point in six years.
Still, there were some positive signs of improvement. The company reported 19.8 percent GAAP gross margins, slightly more than the 18 percent reported last quarter and up slightly from Q3 2023. And Tesla said its cost per vehicle was a record low at $35,100.
The company reported 19.8 percent gross margins
The earnings come after Tesla reported a smaller-than-expected increase in third-quarter deliveries, sending its stock price down. The company said it delivered 462,890 vehicles to customers during the quarter, a 6.3 percent jump from Q2 2023. But analysts had expected more deliveries and now fear the company could be heading for its first annual decline in deliveries after years of rapid growth.
Tesla has struggled with ride-hailing competition and curbing demand for electric cars. The company’s vehicles are still selling strongly in China, but Tesla still faces stiff competition from BYD and others in the world’s largest electric market.
Meanwhile, Elon Musk’s attempt to spin the company into primarily one that sells robots and autonomous vehicles is facing some skepticism. Tesla showed several flashy concepts at its robot taxi event earlier this month, but declined to share details about how the technology would work. The company’s share price plummeted after the event and has yet to fully recover.