Tesla Exceeds Profit Margin Estimates for Q3

Tesla reported a stronger-than-expected profit margin for the third quarter, despite offering generous financial incentives to stimulate demand for its aging electric vehicle lineup.

The Austin-based automaker’s shares rose 4.8% in after-hours trading following the announcement.

The company disclosed that revenue for the July-September period reached $25.18 billion, slightly below analysts’ forecasts of $25.37 billion, according to LSEG data. In the same period last year, Tesla recorded sales of $23.35 billion.

Adjusted earnings for the quarter came in at 72 cents per share, beating the average analyst estimate of 58 cents. Tesla’s profit margin for the quarter stood at 19.8%, exceeding the forecasted 17.3% and improving from the 18% margin in Q2.

Tesla’s Q3 deliveries grew more than 6% year-over-year, marking the first quarter of growth after a decline in the January-June period. Last year, the company aggressively slashed prices, which significantly reduced profit margins.

However, in recent months, Tesla shifted its strategy to offer lower-cost financing options and discounts, which analysts believe could help stabilize margins in the coming quarters. Additionally, falling raw material prices for EV batteries are expected to further ease costs over time.

In a push to accelerate its autonomous technology ambitions, Tesla recently unveiled new products, including the Cybercab robotaxi and a self-driving van for 20 passengers. The company also continues to develop its humanoid robot, Optimus.

These positive margin results reinforce investor confidence, showing Tesla’s ability to adapt its strategy while maintaining profitability, even as it faces growing competition in the electric vehicle market.

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Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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