Tesla, Inc. CEO Elon Musk has once again put excited investors in a hopeful mood with an optimistic forecast for 2024. Musk believes that sales of vehicles by Tesla will grow between 20% to 30% in the following year, repeating again that making electric cars profitably will be the core business for the company. The news pushed Tesla’s stock up 12% in post-market trading and added around $80 billion to the firm’s market value.
Focus on Core Business and Profitability
Speaking to investors, Musk assured them that Tesla is not diverting from its core EV business, yet is specifically encouraging profitability enhancements. Instead, he assuaged investors’ anxiety on whether it can soon produce its much-hyped robotaxi. Although Tesla unveils its robotaxi last month, investors were not that well-roused as if the event did indeed signify movement on production of the long-awaited robotaxi. Still, it gave Musk a chance to remind investors that Tesla is the only profitable EV company.
Robotaxi Rollout and Full Self-Driving
Musk dropped the hint that Tesla’s driverless vehicles, likely to hit roads next year, subject to regulatory approvals in major markets like California and Texas, would hit the road once approval is there. Tesla plans on rolling out paid rides in driverless cars as soon as it attains the said approval, spreading the buzz over Tesla’s autonomous ambitions.
Meanwhile, Tesla saw a significant take rate for its guided autopilot software, called Full Self-Driving, after its robotaxi test. Another means to promote FSD is through offering two free months of FSD this year for existing customers.
Impressive Third-Quarter Results and Margin Growth
Wall Street was pleased with Tesla’s third-quarter profit margin from the sale of its vehicles, excluding regulatory credits, that came in at 17.05%, versus the expected 14.9%. Finance chief Vaibhav Taneja said sustaining such margins would be hard in the fourth quarter, but the results on hand were showing that Tesla was indeed moving in the right direction.
Another move which also helped to offset investor wariness was cutting the company’s cost of goods sold per vehicle to a record level of around $35,100. Third-quarter profits, adjusted for special items, were 72 cents a share, more than the 58 cents forecast by analysts.
The Future Looks Bright
However, Tesla is not slowing down in the further reinforcement of its cars that will shortly integrate more affordable models. The first batch of the latter will be released on the roads in the first half of 2025. Meanwhile, Tesla remains unwavering in cutting its production expenses and transfers great sums of money to AI projects and increases productions.
While certainly still pretty hotly contested, Tesla’s innovative technology, strategic cuts in cost, and profitability present the company in a strong position to compete head-to-head with the more established players in the EV market. With Musk promising ‘substantial’ sales growth, too, the future looks decidedly brighter than darker, with even the most skeptical investor eager for what is to come from Tesla.
