Tesla has released its financial results for the third quarter of 2024, and with them, a rare and bold prediction for the fourth quarter. The automaker expects to set a record in vehicle deliveries, sending Tesla’s stock soaring by 8% in aftermarket trading.
While Tesla narrowly missed revenue expectations by around $300 million in Q3, the company still beat earnings per share (EPS) forecasts, reporting $0.72, exceeding projections by $0.12. Tesla’s ability to maintain higher-than-expected margins last quarter helped buffer the revenue miss, though it’s not the primary reason for the stock’s surge.
The jump in Tesla’s stock price is more attributed to its Q4 guidance – a rare move from the company. Tesla is known for providing vague or limited forecasts for future performance, making its clear prediction for vehicle deliveries in Q4 stand out. The automaker indicated it expects “slight growth” in deliveries for 2024 despite macroeconomic challenges. To achieve this, Tesla needs to deliver around 515,000 vehicles in Q4. This represents a 6% year-over-year increase and a significant 11% growth from the previous quarter, a figure that caught many analysts off guard.
The higher profits in Q3 were driven in part by the sale of $739 million in regulatory credits, as well as additional revenue from Tesla’s Full Self-Driving (FSD) software. The latter has been a point of controversy, as Tesla has yet to fully deliver on its self-driving promises but continues to recognize revenue from incremental software updates it deems progress toward that goal.
With Tesla’s bold Q4 prediction and strong margins, the automaker looks poised to end 2024 on a high note, even as debates surrounding its self-driving claims persist.