By outdoor-nature-child.com After two slow quarters, Tesla CEO Elon Musk announced that the electric-vehicle maker has reported earnings per share that exceeded expectations. In a recent earnings call, Musk expressed optimism about the company’s future, as Tesla shares surged by 12% following the third-quarter earnings report.
Tesla posted an earnings per share of $0.72, surpassing Wall Street’s prediction of $0.60. Musk had previously indicated that the steep decline in profits seen in the second quarter was a temporary setback, largely attributed to intense competition from more affordable electric vehicles produced by rivals like BYD. “We don’t see this as a long-term issue,” Musk remarked in July. “It’s really fairly short term.”
However, the company did fall short in terms of revenue, reporting $25.18 billion compared to Wall Street’s expectations of $25.43 billion. In a press release, Tesla emphasized its commitment to focus on expanding its vehicle and energy lineup, reducing costs, and making essential investments in AI projects and increasing production capacity despite ongoing macroeconomic challenges and a pullback in EV investments.
During the earnings call, Musk declared that Tesla had achieved a record third quarter and confidently predicted that if the company executes its plans effectively, it will become the most profitable company in the world. “Tesla is focused on the future of energy, transport, robotics, and AI while others are mostly managing short-term challenges,” he stated. “If we execute our objectives, I believe Tesla will become the most valuable company in the world—probably by a long shot.”
Musk pointed out that as of now, he is unaware of any electric vehicle manufacturer currently in the black. Tesla delivered 462,890 vehicles by the end of the third quarter, up from 443,956 in the previous quarter, and investors are keen to know if the company is on track to achieve its 2023 delivery goal of 1.8 million vehicles. The company has projected modest growth in vehicle deliveries by year-end, with Dan Ives from Wedbush Securities notably expressing confidence in this target despite challenges experienced earlier in the year.
Investors are also eager for updates on Tesla’s robotaxi initiative following a less-than-enthusiastic launch event. The unveiling, which lacked substantial details, caused shares to drop nearly 9%, erasing over $60 billion from the company’s market value. Tom Narayan, an analyst at Royal Bank of Canada, criticized the event as being more about branding than providing concrete data.
Musk has made ambitious claims about the future of the Cybercab ride-hail network, predicting it will reach volume production by 2026 and that Tesla aims to produce 2 million units per year. He anticipates rolling out ride-hailing services in California and Texas next year, pending regulatory approval, with the possibility of expanding to other states. Additionally, Musk has called for a federal path toward regulating autonomous vehicles.
Integrating Grok, a generative AI chatbot developed by his startup xAI, into Tesla’s vehicles is also on Musk’s agenda, alongside potential plans for flying cars.
Nevertheless, Musk’s recent political endeavors have drawn scrutiny. His active campaigning for Donald Trump and the establishment of a $1 million daily giveaway for voters in swing states have raised legal concerns, with calls for investigations into the legality of such practices.
Consumer sentiment toward Tesla may also be influenced by Musk’s political activities. A survey from Edmunds revealed that 31% of respondents were less inclined to purchase a Tesla because of Musk. Additionally, 37% indicated they were waiting for election results before making their buying decisions, while 44% of Democratic women reported being less likely to buy a Tesla due to Musk’s actions.
Despite these challenges, the demand for electric vehicles continues to rise, with the US EV market share reaching an all-time high of 8.3%, up from 7.5% in the same quarter last year, according to Edmunds.
Meanwhile, Musk is facing legal scrutiny in Europe as well, where the EU is considering fining X, which is associated with Musk’s ventures like SpaceX, Neuralink, xAI, and the Boring Company, for failing to address illegal content on its platform. Penalties could reach up to 6% of a company’s annual revenue, but Tesla is likely to be exempt as it is publicly traded and not wholly owned by Musk.