Following the recent release of its financial results for Q3 2024, Tesla (TSLA) is anticipating a record-breaking fourth quarter – a rare forecast for the electric automaker. Despite falling short of revenue expectations by approximately $300 million last quarter, Tesla exceeded earnings per share projections by $0.12, boasting an EPS of $0.72, thanks to higher-than-anticipated margins. However, the stock’s 8% surge in aftermarket trading is not solely attributed to these profits.
The surge in stock price can be largely attributed to Tesla’s uncharacteristic decision to provide guidance for Q4. Known for its vague future performance predictions, Tesla has now offered a clearer insight into its expectations for the upcoming quarter. The company anticipates achieving slight growth in vehicle deliveries in 2024, despite prevailing macroeconomic conditions. With the knowledge of the number of vehicles delivered last year and so far this year, it is evident that Tesla needs to deliver 515,000 vehicles in Q4 to achieve growth in 2024.
While a 6% increase in deliveries year-over-year may seem modest, a more significant 11% increase quarter-to-quarter was unexpected by many, hence the positive market response. Recent reports also indicate that Tesla is proactively offering discounts to boost sales early in the quarter, deviating from its usual end-of-quarter sales strategy.
The automaker’s financial performance continues to be a topic of discussion, particularly in light of the controversial recognition of revenue from regulatory credits and “Full Self-Driving” features. Despite the ongoing skepticism surrounding Tesla’s self-driving capabilities, the company continues to recognize revenue from these features as it rolls out software updates aimed at advancing towards autonomous driving.
As Tesla gears up for what appears to be a promising fourth quarter, investors and analysts alike will be closely monitoring the company’s delivery numbers and financial performance. The electric automaker’s ability to meet its projected deliveries and navigate the evolving market landscape will undoubtedly shape its performance in the coming months.
