TLDR:
- Tesla posts strong Q3 earnings with EPS of $0.72, beating $0.60 estimates
- Production costs drop to record low of $34,544 per car, boosting per-vehicle profit to $8,698
- Stock surges 22% in single day, marking biggest gain since 2013
- Musk projects 20-30% delivery growth for 2025
- Multiple major analysts raise price targets and maintain Buy ratings
Tesla (NASDAQ: TSLA) demonstrated remarkable operational efficiency in its third quarter earnings report, driving its stock to record gains as production costs hit all-time lows and analysts raised their price targets.
The electric vehicle leader reported earnings of $0.72 per share on revenue of $25.2 billion, handily beating analyst estimates of $0.60 per share. The company delivered 462,890 vehicles during the quarter, showing continued strong demand.
In a major breakthrough, Tesla achieved record-low production costs of $34,544 per vehicle in Q3, leading to improved per-vehicle gross profit of $8,698, up from $8,269 in the previous quarter. This marks the first sequential growth in per-vehicle profitability since Q1 2022.
The market responded enthusiastically to these results, sending Tesla shares up 22% in a single day – the stock’s largest one-day gain since 2013. The rally extended into the following session with an additional 3.3% increase.
CEO Elon Musk outlined an ambitious growth trajectory, projecting a 20-30% increase in vehicle deliveries for 2025. This forecast comes as the company’s manufacturing optimization efforts begin showing clear results.
Bank of America raised its price target on Tesla to $265 from $255, with senior auto analyst John Murphy indicating potential for further target increases. Morgan Stanley maintained its positive stance, particularly encouraged by Tesla’s renewed focus on its core automotive business.
Multiple other major Wall Street firms, including Deutsche Bank, Wedbush, Canaccord Genuity, and William Blair, reaffirmed their Buy ratings on Tesla stock following the earnings report. Canaccord Genuity raised its price target to $298, citing Tesla’s innovative approach and expanding product offerings.
The strong earnings report proved costly for short sellers, who lost $4.2 billion in just two days following the announcement, according to data from S3 Partners. This mirrors a similar situation in April when short sellers lost over $5 billion after Tesla’s Q1 results.
Tesla’s automotive segment, which accounts for 80% of revenue, showed particular strength. Morgan Stanley analyst Adam Jonas highlighted the company’s strategic focus on profitable growth in its core business while maintaining leadership in innovation.
The company’s delivery numbers continue to show momentum, with Q3 deliveries of 462,890 vehicles marking an improvement from last year’s 435,059 units. This growth comes despite varying market conditions globally.
Tesla’s margin improvement strategy appears to be paying off, with cost reductions outpacing price adjustments. The company achieved this through manufacturing efficiencies and strategic supply chain management.
The latest quarterly results validate Tesla’s long-term strategy of sacrificing short-term margins for market share, as production efficiency gains now drive profit growth alongside volume increases.
Technical analysis shows strong support at current levels, with momentum indicators suggesting potential for continued upward movement. Trading volumes have surged on positive news, indicating strong institutional interest.
Looking ahead, Tesla’s focus on cost reduction and manufacturing efficiency positions it well for the planned introduction of new models. The company’s ability to improve margins while maintaining high production volumes suggests strong execution of its strategic plans.
Tesla’s solid balance sheet and improving cash flow provide flexibility for future investments in capacity expansion and new technology development. The company continues to maintain its leadership position in the EV market while advancing autonomous driving capabilities.
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