As a seasoned gamer and tech enthusiast with a soft spot for innovative companies, I must say that Tesla’s Q3 2024 earnings report has caught my attention. The numbers may not have hit every analyst’s expectations, but the sheer magnitude of their ambitions and the pace at which they are moving is nothing short of breathtaking.
In the after-hours trading following Tesla’s release of its Q3 2024 financial results, the company’s stock is responding to the news. The electric vehicle manufacturer reported an adjusted earnings per share (EPS) of $0.62 and revenues totaling $25.18 billion for the quarter. However, the EPS figure was slightly lower than the predicted “whisper number” of $0.65/share, whereas it managed to exceed the analysts’ consensus estimate of $0.58/share. The reported revenues also fell short of Wall Street analyst expectations of $25.4 billion.
Listen to the Tesla (TSLA) Q3 2024 earnings call
Tesla (TSLA) Q3 2024 Earnings Release
Check out the full TSLA Q3 2024 earnings report on the Tesla Investor Relations website.
Highlights
Profitability
- $2.7B GAAP operating income in Q3
- $2.2B GAAP net income in Q3
- $2.5B non-GAAP net income in Q3
Cash
- Operating cash flow of $6.3B in Q3
- Free cash flow of $2.7B in Q3
- $2.9B increase in our cash and investments in Q3 to $33.6B
Operations
- Operations Increased AI training compute by over 75% in Q3
- Cybertruck became the third best-selling EV in Q3 in the U.S. (behind only Model Y and Model 3)
- Over two billion miles driven cumulatively on FSD (Supervised) as of Q3 with more than 50% on V12
Summary
In the third quarter, we achieved impressive outcomes, demonstrating an increase in vehicle shipments compared to both the previous period and the same quarter last year. This growth led to a new record for third-quarter production volumes. Additionally, we recorded our second highest quarter of earnings from regulatory credits, as other automakers are still lagging behind in meeting emissions standards.
The cost per vehicle for our goods sold (COGS) has reached an all-time low at approximately $35,100. To drive the global shift towards renewable energy further, we aim to make electric vehicles (EVs) accessible and affordable for everyone, ensuring that the total cost per mile competes favorably with every mode of transportation. Plans are moving forward for the release of new vehicle models, some of which will be more budget-friendly, starting in the first half of 2025. At our “We, Robot” event on October 10th, we outlined our long-term ambition to provide autonomous transportation at a per-mile cost lower than ride-sharing services, personal car ownership, and even public transit.
In this latest quarter, the Energy sector registered impressive results, boasting an all-time high gross margin. Furthermore, our Lathrop Megafactory managed to produce 200 Megapacks within a single week, and we’ve broken yet another record with consecutive record-breaking Powerwall deployments for the second quarter running as we steadily ramp up Powerwall 3 production.
Regardless of persistent economic challenges and some companies scaling back their electric vehicle (EV) investments, we’re committed to broadening our selection of automotive and energy products, lowering costs, and investing strategically in artificial intelligence (AI) initiatives and manufacturing capabilities. We are confident that these actions will enable us to profit from the ongoing transformation occurring in both the transportation and energy industries.
Revenue
Total revenue increased 8% YoY in Q3 to $25.2B. YoY, revenue was impacted by the following items:
- Growth in vehicle deliveries (+)
- Growth in Energy Generation and Storage and Services and Other (+)
- Higher FSD revenue recognition YoY for releases related to Cybertruck and certain features such as Actually Smart Summon (+)
- Higher regulatory credit revenue (+)
- Reduced S3XY vehicle average selling price (ASP) (excluding FX impact), due to mix, pricing, and attractive financing options
Profitability
In the third quarter, our year-over-year operating income rose to $2.7 billion, yielding an operating margin of 10.8%. The main factors influencing this year-over-year increase in operating income were:
- Lower cost per vehicle, including lower raw material costs, freight and duties and other one-time charges (+)
- Growth in Energy Generation and Storage and Services and Other gross profit (+)
- Higher FSD revenue recognition YoY for releases related to Cybertruck and certain features such as Actually Smart Summon (+)
- Growth in vehicle deliveries (+)
- Higher regulatory credit revenue (+)
- Decrease in operating expenses including cost-reduction efforts (+)
- Reduced S3XY vehicle ASP (-)
Cash
In the third quarter, our total cash, cash equivalents, and investments amounted to approximately $33.6 billion. This figure represents a rise of about $2.9 billion compared to the previous quarter. The main cause behind this growth was a positive free cash flow of around $2.7 billion.
Outlook
Volume
Our business is right now at a pivotal point, transitioning from two significant periods of expansion: The initial surge was sparked by the global rollout of our Model 3/Y platform, and we anticipate the following wave to be ignited by advancements in autonomous driving technology and the launch of new products, including those based on our future vehicle architecture. Despite challenging economic circumstances, we are optimistic about experiencing modest growth in vehicle deliveries in 2024. Our energy storage projects are projected to see a substantial increase, approximately doubling from the previous year, in 2024.
Cash
Our current resources are more than enough to finance our product development schedule, future growth initiatives, and all other operational costs. Additionally, we aim to run our operations in a way that ensures a robust financial position, even amidst the unpredictability of the current economic climate.
Profit
As we persistently work towards advancements that lower manufacturing and operational costs, it’s likely that in the future, our hardware earnings will be complemented by a swift increase in profits from AI, software, and our fleet-related endeavors.
Product
The timeline for introducing new automobiles, including cost-effective options, is still set for the commencement of production in early 2025. These vehicles will incorporate elements from the upcoming generation platform alongside aspects of our existing platforms, enabling them to be manufactured on the same assembly lines as our current vehicle models.
As a gamer, I’m choosing a strategy that might not bring the significant cost reduction we initially anticipated, but it allows us to thoughtfully increase our vehicle output in a way that’s more economical during these uncertain times. This move should maximize our ability to produce nearly three million vehicles, representing over 50% growth from our 2023 production levels, without having to invest in new manufacturing lines just yet.
The custom-designed Robotaxi we’re developing will persistently follow an innovative “open-environment” production approach.
Developing…
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2024-10-23 23:58