Tesla CEO Elon Musk has projected a significant boost in vehicle sales, expecting growth of 20% to 30% next year. This reassuring forecast calmed investors, emphasizing the company’s ongoing focus on profitably selling electric vehicles (EVs) while reducing concerns about the production timeline for its anticipated robotaxi. Following the announcement, Tesla’s stock surged by 12% in post-market trading, adding approximately $80 billion to its market value.
Musk’s comments follow a target of “slight growth” in deliveries for this year, supported by a drop in vehicle production costs. This has helped Tesla maintain its industry-leading margins, even as the company continues to focus on future developments like autonomous cars. The unveiling of the robotaxi on October 10 received a lukewarm response from investors, but Musk remains optimistic about Tesla’s profitability in a challenging EV market.
“No EV company is even profitable,” Musk said during a conference call with analysts. He highlighted that Tesla’s profitability stands out in a difficult automotive landscape, where many competitors are struggling. Shares of smaller EV manufacturers, including Rivian and Lucid, rose by around 2% in after-hours trading following Musk’s remarks.
Tesla aims to roll out fully autonomous vehicles offering paid rides next year, pending regulatory approval in California and Texas. The company also reported that sales of its Full Self-Driving (FSD) software have surged since the robotaxi event, with Tesla offering a free month-long trial of FSD for the second time this year.
Despite uncertain demand and competitors scaling back their EV investments, Tesla continues to expand its vehicle lineup and reduce production costs. The company confirmed its preparations for launching new, more affordable vehicles in the first half of 2025, positioning itself to capture a broader market.
Tesla’s third-quarter vehicle sales profit margin, excluding regulatory credits, increased to 17.05%, up from 14.6% in the previous quarter. This exceeded Wall Street’s expectations of 14.9%. The company also achieved its lowest-ever production cost per vehicle, averaging $35,100. Tesla’s adjusted profit for the quarter was 72 cents per share, surpassing the forecasted 58 cents.
Though the company’s CFO, Vaibhav Taneja, acknowledged challenges in maintaining these margins through the fourth quarter, Tesla remains optimistic about further cost reductions, aided by decreasing raw material prices. Capital expenditures are expected to exceed $11 billion in 2025 as Tesla continues to expand production capacity and invest in artificial intelligence projects.
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