Tesla reported record third-quarter revenue, exceeding Wall Street estimates, primarily driven by a surge in electric vehicle sales as US buyers sought to secure a federal tax credit before its expiration. However, the company's profit fell short of expectations due to increased tariff and research costs, alongside a decline in income from regulatory credits which are diminishing due to recent legislation. Consequently, Tesla's stock experienced a slight dip in after-hours trading.
The expiration of the tax credit, coupled with a general expectation of reduced demand for electric vehicles through the remainder of the year, presents a challenge for Tesla and its competitors. While Tesla's valuation is heavily influenced by future prospects in robotics and AI, current vehicle sales remain critical for financial stability. The company acknowledged near-term uncertainty from policy shifts but reaffirmed its focus on long-term growth.
To address potential demand issues, Tesla has introduced cheaper vehicle variants, cutting prices by around $5,000 to $5,500. While this strategy aims to boost sales volume, analysts caution that the cost reductions may not fully offset the lower selling prices, potentially impacting profit margins. Tesla also indicated that volume production for its Cybercab robotaxi, Semi truck, and Megapack 3 battery is on track for 2026.
Financially, Tesla's third-quarter revenue reached $28.1 billion, surpassing the analyst consensus of $26.37 billion. However, profit per share was 50 cents, below the estimated 55 cents. Income from automotive regulatory credits significantly decreased, falling to $417 million from $739 million in the previous year. Tesla's automotive gr... download the app to read more
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