Tesla Shares Surge Following Profit Increase Amid Lower Expenses

AFP/APP

New York: Tesla shares experienced a significant boost on Wednesday after the company reported a 17% increase in third-quarter profits, reaching $2.2 billion.

This profit growth was attributed to a rise in auto sales and reduced expenses, which helped offset the impact of declining vehicle prices.

The electric vehicle giant announced revenues of $25.2 billion, an 8% increase compared to the same period last year. This marked a turnaround from recent earnings reports, where Tesla faced challenges due to heightened competition in the EV market.

In a news release, Tesla highlighted its strong performance in Q3, noting record vehicle delivery volumes both sequentially and year-over-year, following a reported 6% increase in sales.

A key focus for investors was how Tesla would maintain profitability after implementing price cuts in response to increased competition from other automakers. The company indicated that lower material and freight costs contributed to improved profit margins.

Looking ahead, Tesla anticipates “slight growth” in 2024 deliveries despite challenging macroeconomic conditions. However, the company had previously cautioned that volume growth may be significantly lower than the 38% surge seen in 2023.

In after-hours trading, Tesla shares surged 8.3%, reflecting investor optimism in light of the latest financial results.