Tesla surprised Wall Street yesterday (Oct. 23) with a strong third-quarter earnings report amid a tough market for the electric vehicle industry. The Elon Musk-helmed carmaker saw its revenue jump 8 percent year over year to $25 billion between July and September, while its net income rose by 17 percent to $2.2 billion.
Besides a 2 percent rise in automotive revenue, the company’s sales were largely bolstered by a 52 percent increase in its energy generation and storage business and a 29 percent rise in other services like its supercharging network. Tesla’s profits were additionally lifted by nearly $740 million in automotive regulatory credits, which the EV maker has in excess and sells to other automobile companies. The company’s shares jumped more than 19 percent today (Oct. 24) to $256, the highest in three months.
Musk yesterday told analysts he expects Tesla’s EV sales to increase by 20 percent to 30 percent in 2025, “notwithstanding negative external events” like a rise in interest rates or geopolitical conflict. This positive outlook is spurred on the company’s “lower cost vehicles” and “the advent of autonomy,” said the Tesla founder on an earnings call.
Tesla also revealed plans to unveil new and more affordable vehicles in the first half of 2025. The company’s most affordable car is the Model 3, which starts at around $43,000. The EV maker’s future offerings will include reducing the cost of some current models to under $30,000 (likely after tax incentives) and the subsequent launch of its robotaxi, Musk told analysts, adding that the company no longer has plans to introduce a $25,000 non-autonomous EV despite having previously floated the idea. Launching a regular $25,000 model is “pointless” and “silly” in light of the company’s new pivot towards autonomous vehicles, Musk said.
Musk has been gradually repositioning Tesla as one centered upon self-driving, robotics and A.I. Earlier this month, the company unveiled a “Cybercab” prototype—an autonomous taxi without steering wheels or pedals. While the event was sparse on concrete details and timelines and largely failed to impress investors, the Tesla CEO remains steadfast in his vision for autonomous driving.
“It should be, frankly, blindingly obvious at this point that that is the future,” said Musk yesterday. “Non-autonomous gasoline vehicles in the future will be like riding a horse and using a flip phone. It’s not that there are no horses—there are some horses, but they’re unusual.”
Musk said he is already testing out a robotaxi service for Tesla employees in the Bay Area, who are using a prototype of the company’s ride-hailing app. For the time being, these rides are still being overseen by a safety driver. Paid robotaxi services are expected to be rolled out in California and Texas next year before expanding to other states, added the CEO, who said he expects the launch in California to be subject to a lengthy regulatory process but is optimistic about an approval. The introduction of such services will mark “a profound change,” said Musk. “Tesla becomes more than a vehicle and manufacturing company at that point.”