New York
CNN
—
Tesla Wednesday reported an unexpected improvement in earnings for the third quarter, lifting its recently battered shares in after-hours trading.
The company reported a 6% increase in sales volume, which was fairly modest for an automaker that not long ago was reporting 50% annual growth in vehicles sold. But the better profit came from success in cutting its cost to build vehicles. The company said the average cost per vehicle built came down to its lowest level ever at $35,100, down about $2,400, or 6%, from a year earlier.
Tesla has been leading a price war in the electric vehicle sector, as a response to increased competition, especially from Chinese automakers. Investors had previously sold off Tesla shares (TSLA), disappointed by lack of details at a company event on plans for self-driving robotaxis. But shares rose about 9% in after-market trading following the report.
For the quarter Tesla earned $2.5 billion in the quarter, or 72 cents a share, up 8% from a year ago. Analysts’ consensus forecast had been forecasting earnings per share to slip to 59 cents.
Tesla’s increased revenue didn’t come from selling cars, however. Revenue from the traditional car company business model was up only 1% compared to a year earlier. But it had a $185 million increase, or 33%, in the sale of regulatory credits. Tesla, with its all-electric offering, sells credits to legacy automakers who are still mostly selling gasoline-fueled vehicles and have not sold enough low- or no-emissions vehicles to meet environmental regulations. Those sales were down slightly from second quarter though.
It also saw revenue from the sale of solar cells, batteries and other energy products nearly double, rising $1.5 billion or 93% compared to a year earlier.
The company also said preparations remain underway for new vehicles, including more affordable models that it plans to launch in the first half of 2025. But Tesla is well known for not meeting its self-imposed targets for debuting new vehicles.
The company also said that the Cybertruck, its futuristic-looking pickup, was profitable for the first time. The truck has been dogged by problems and recalls, however, including a recall of all 27,000 of the pickups on US roads earlier this month due to problems with its backup camera. It is the fifth recall for the vehicle since it went into production a year ago.
This story has been updated with additional context and developments.
