Tesla's stock surged more than 12 per cent in after-hours trading on Wednesday, despite reporting earnings that missed analysts' estimates, as the company confirmed plans to begin producing cheaper models by mid-2025.
The company also announced it is testing a ride-hailing service in the Bay Area, San Francisco, expected to begin operations next year.
The Texas-based electric vehicle maker, which is struggling with weak sales and rising competition in the Chinese market, said the new models will be produced on the same factory lines as its current line-up.
This approach, according to Tesla, will allow the company to increase vehicle volumes in a more spending-efficient manner during uncertain times.
“This should help us fully utilise our current expected maximum capacity of close to three million vehicles, enabling more than 50 per cent growth over 2023 production before investing in new manufacturing lines,” the company said.
Tesla did not announce the names of the new models or the expected price range. It had announced its plan to introduce cheaper vehicles to attract more customers in April this year.
The company’s chief executive and co-founder Elon Musk said that his “best guess” is that vehicle growth will reach between 20 per cent and 30 per cent in 2025, boosted by “lower-cost vehicles” and the “advent of autonomy”.
He said the company has also developed an in-house ride-hailing app that some employees have been able to use in California this year.
“You can request [an autonomous] ride and it will take you anywhere in the Bay Area … we do have a safety driver for now,” Mr Musk said during the earnings call.
He said the company is expected to introduce the service to the public next year in California and Texas.
Tesla plans to reduce costs to make EVs cheaper
Tesla said the cost of goods sold per vehicle came down to its lowest ever at nearly $35,100, a figure derived by dividing its car sales revenue by the number of new vehicle deliveries in the quarter.
To continue accelerating the world’s transition to sustainable energy, Tesla said it needs to “make EVs affordable for everyone, including making total cost of ownership per mile competitive with all forms of transportation”.
“It's great to see Tesla getting down to business when it really matters,” Thomas Monteiro, senior analyst at Investing.com, told The National.
“The improving numbers across the board signal the company may have finally found a nice, sweet spot for the pricing versus production costs equation, which has been the main issue for stock performance since last year.”
Tesla's stock is one of the worst performers in the S&P 500 index, which has jumped nearly 22.3 per cent since the start of the year.
Its shares closed almost 2 per cent down at $213.65 on Wednesday, giving the company a market value of $669.47 billion.
But after the earnings announcement and disclosure of new plans, the stock jumped 12.1 per cent in after-market hours to trade at $239.50
The company's shares have dropped nearly 14 per cent since the start of the year. In April, the car maker announced plans to cut its workforce by more than 10 per cent.
Mr Musk said the move would help the company to become “lean, innovative and hungry for the next growth phase cycle”.
Tesla missing analysts’ expectations
Tesla reported a 17 per cent yearly jump in third-quarter net profit to nearly $2.2 billion. It was 46.6 per cent up on a quarterly basis.
Revenue during the July-September period increased 8 per cent to nearly $25.2 billion, missing analysts’ expectations of $25.3 billion. It was the ninth straight quarter the company reported $20 billion or more in sales.
Earnings per share grew 17 per cent to 62 cents exceeding expectations of 42 cents based on a survey of analysts by LSEG.
Tesla's profit margins were driven by $739 million in automotive regulatory credits revenue during the quarter.
Automotive regulatory credits are government-issued incentives that Tesla earns by exceeding emissions standards, which it can sell to other car makers that fall short of meeting the regulatory standards. This allows those companies to avoid fines for non-compliance.
“The market got the message it needed to hear … Tesla's margins are improving right when they needed to – that is, ahead of a better interest environment globally. This means the company may have more firepower to get the innovation it desperately needs both on the production and product sides faster and better than the competition,” Mr Monteiro said.
The company’s automotive revenue surged 2 per cent to $20 billion, while energy generation and storage revenue expanded 52 per cent to nearly $2.4 billion in the last quarter.
Tesla said its operating income increased by 54 per cent yearly to more than $2.7 billion in the last quarter, while operating expenses decreased 6 per cent to nearly $2.3 billion.
Earlier this month, at the company's long-anticipated robotaxi event, Mr Musk displayed the new Cybercab autonomous concept vehicle. He said production will start in 2026 and the vehicles will be available for customers to buy for less than $30,000. They will cost 20 cents a mile to operate, he said.
In a shareholder letter on Wednesday, Tesla announced that as of October 22, it had produced 7 million vehicles. The company said its newest model, the cybertruck, became the third best-selling EV in the US, trailing only the Model 3 and Model Y.
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The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
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Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
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UAE FIXTURES
Friday February 18: v Ireland
Saturday February 19: v Germany
Monday February 21: v Philippines
Tuesday February 22: semi-finals
Thursday February 24: final
England World Cup squad
Eoin Morgan (capt), Moeen Ali, Jofra Archer, Jonny Bairstow, Jos Buttler (wkt), Tom Curran, Liam Dawson, Liam Plunkett, Adil Rashid, Joe Root, Jason Roy, Ben Stokes, James Vince, Chris Woakes, Mark Wood
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Company%20Profile
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The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
Disposing of non-recycleable masks
- Use your ‘black bag’ bin at home
- Do not put them in a recycling bin
- Take them home with you if there is no litter bin
- No need to bag the mask
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
The biog
Siblings: five brothers and one sister
Education: Bachelors in Political Science at the University of Minnesota
Interests: Swimming, tennis and the gym
Favourite place: UAE
Favourite packet food on the trip: pasta primavera
What he did to pass the time during the trip: listen to audio books