Tesla has reported its financial results for the third quarter of 2024, showcasing solid performance despite a challenging market for automakers. The company was able to surpass earnings expectations but fell short of revenue forecasts, sending Tesla’s stock up by nearly 10% in after-hours trading.
Tesla reported total revenue of $25.18 billion for Q3 2024, slightly below the consensus estimate of $25.47 billion. While the revenue fell short of market expectations, the company’s profitability provided a boost. Tesla posted non-GAAP earnings per share (EPS) of $0.72, beating analysts’ expectations of $0.60. The company’s GAAP EPS came in at $0.62.
Tesla also reported $2.7 billion in operating income for the quarter and net income of $2.17 billion under GAAP, a notable improvement over the previous year’s results and a return to year-over-year profit growth after four consecutive quarters of declining profits.
A surprising figure in Tesla’s report was the significant improvement in gross margins, which increased to 19.8% during Q3, it’s highest figure ever and up from 18% in Q2. This was partly driven by Tesla’s ability to reduce its cost of goods sold (COGS) per vehicle to an all-time low of around $35,100.
The company has been under pressure in recent quarters due to aggressive pricing strategies and rising interest rates. However, the improvement in margins this quarter suggests that Tesla is finding ways to offset these challenges, even as it offers more competitive financing options, such as 0% financing it introduced in several markets around the world this year.
Tesla also reported significant gains from selling automotive regulatory credits, which contributed $739 million in revenue. This was well above estimates, but below Q2 2024 which saw $890 million in credits. This money comes from credits Tesla sells to other automakers to help them meet government emissions standards.
You can read Tesla’s full Q3 2024 earnings report below. The company will be holding its earnings call at 5:30pm ET/4:30pm CT/2:30pm PT.
