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.
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
SERIE A FIXTURES
Friday Sassuolo v Torino (Kick-off 10.45pm UAE)
Saturday Atalanta v Sampdoria (5pm),
Genoa v Inter Milan (8pm),
Lazio v Bologna (10.45pm)
Sunday Cagliari v Crotone (3.30pm)
Benevento v Napoli (6pm)
Parma v Spezia (6pm)
Fiorentina v Udinese (9pm)
Juventus v Hellas Verona (11.45pm)
Monday AC Milan v AS Roma (11.45pm)
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
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Related
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
Mica
Director: Ismael Ferroukhi
Stars: Zakaria Inan, Sabrina Ouazani
3 stars
ABU%20DHABI'S%20KEY%20TOURISM%20GOALS%3A%20BY%20THE%20NUMBERS
%3Cp%3EBy%202030%2C%20Abu%20Dhabi%20aims%20to%20achieve%3A%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E%E2%80%A2%2039.3%20million%20visitors%2C%3C%2Fstrong%3E%20nearly%2064%25%20up%20from%202023%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E%E2%80%A2%20Dh90%20billion%20contribution%20to%20GDP%2C%3C%2Fstrong%3E%20about%2084%25%20more%20than%20Dh49%20billion%20in%202023%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E%E2%80%A2%20178%2C000%20new%20jobs%2C%3C%2Fstrong%3E%20bringing%20the%20total%20to%20about%20366%2C000%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E%E2%80%A2%2052%2C000%20hotel%20rooms%2C%3C%2Fstrong%3E%20up%2053%25%20from%2034%2C000%20in%202023%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E%E2%80%A2%207.2%20million%20international%20visitors%2C%3C%2Fstrong%3E%20almost%2090%25%20higher%20compared%20to%202023's%203.8%20million%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3E%E2%80%A2%203.9%20international%20overnight%20hotel%20stays%2C%3C%2Fstrong%3E%2022%25%20more%20from%203.2%20nights%20in%202023%3C%2Fp%3E%0A
How%20to%20avoid%20getting%20scammed
%3Cul%3E%0A%3Cli%3ENever%20click%20on%20links%20provided%20via%20app%20or%20SMS%2C%20even%20if%20they%20seem%20to%20come%20from%20authorised%20senders%20at%20first%20glance%3C%2Fli%3E%0A%3Cli%3EAlways%20double-check%20the%20authenticity%20of%20websites%3C%2Fli%3E%0A%3Cli%3EEnable%20Two-Factor%20Authentication%20(2FA)%20for%20all%20your%20working%20and%20personal%20services%3C%2Fli%3E%0A%3Cli%3EOnly%20use%20official%20links%20published%20by%20the%20respective%20entity%3C%2Fli%3E%0A%3Cli%3EDouble-check%20the%20web%20addresses%20to%20reduce%20exposure%20to%20fake%20sites%20created%20with%20domain%20names%20containing%20spelling%20errors%3C%2Fli%3E%0A%3C%2Ful%3E%0A
'The Batman'
Stars:Robert Pattinson
Director:Matt Reeves
Rating: 5/5
LA LIGA FIXTURES
Friday (UAE kick-off times)
Real Sociedad v Leganes (midnight)
Saturday
Alaves v Real Valladolid (4pm)
Valencia v Granada (7pm)
Eibar v Real Madrid (9.30pm)
Barcelona v Celta Vigo (midnight)
Sunday
Real Mallorca v Villarreal (3pm)
Athletic Bilbao v Levante (5pm)
Atletico Madrid v Espanyol (7pm)
Getafe v Osasuna (9.30pm)
Real Betis v Sevilla (midnight)
CHATGPT%20ENTERPRISE%20FEATURES
%3Cp%3E%E2%80%A2%20Enterprise-grade%20security%20and%20privacy%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Unlimited%20higher-speed%20GPT-4%20access%20with%20no%20caps%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Longer%20context%20windows%20for%20processing%20longer%20inputs%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Advanced%20data%20analysis%20capabilities%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Customisation%20options%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Shareable%20chat%20templates%20that%20companies%20can%20use%20to%20collaborate%20and%20build%20common%20workflows%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Analytics%20dashboard%20for%20usage%20insights%3C%2Fp%3E%0A%3Cp%3E%E2%80%A2%20Free%20credits%20to%20use%20OpenAI%20APIs%20to%20extend%20OpenAI%20into%20a%20fully-custom%20solution%20for%20enterprises%3C%2Fp%3E%0A
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Top Hundred overseas picks
London Spirit: Kieron Pollard, Riley Meredith
Welsh Fire: Adam Zampa, David Miller, Naseem Shah
Manchester Originals: Andre Russell, Wanindu Hasaranga, Sean Abbott
Northern Superchargers: Dwayne Bravo, Wahab Riaz
Oval Invincibles: Sunil Narine, Rilee Rossouw
Trent Rockets: Colin Munro
Birmingham Phoenix: Matthew Wade, Kane Richardson
Southern Brave: Quinton de Kock
Killing of Qassem Suleimani
The years Ramadan fell in May