Tesla Announces Launch of More Affordable EVs in 2025
Following its recent robotaxi event, which did not meet expectations, Tesla disclosed in its third quarter earnings report that it plans to introduce a "more affordable" electric vehicle in the first half of 2025.
In its statement, Tesla emphasized the need to make electric vehicles accessible to a wider audience, saying, "In order to continue accelerating the world’s transition to sustainable energy, we need to make EVs affordable for everyone, including making total cost of ownership per mile competitive with all forms of transportation." The company confirmed that they are in the process of developing new vehicle models, which are expected to be launched in early 2025.
During the third quarter, Tesla reported a net income of $2.2 billion, and generated $25.2 billion in revenue. This reflects a 7 percent year-over-year increase compared to $23.4 billion in revenue during the same period last year. The net income rose 17 percent, surpassing analyst expectations, who had predicted a 9 percent decline in quarterly profits while anticipating a 9 percent revenue increase, according to FactSet.
Tesla's revenue from regulatory credits continues to perform well, achieving one of the highest quarters for such revenues as other manufacturers struggle to meet emissions standards.
The company's gross margins have also been discussed, especially as investors hope for improvement after a decline that has lasted several months. The company faced several challenges, including price reductions and decreasing demand, which have adversely affected its margins, bringing them to the lowest rate in six years.
However, there were signs of recovery, with Tesla reporting gross margins of 19.8 percent based on generally accepted accounting principles. This is a slight increase from the 18 percent reported last quarter and also improved from the same time last year.
The latest earnings report came after Tesla experienced a smaller-than-expected increase in vehicle deliveries for the third quarter. The company delivered 462,890 vehicles, a 6.3 percent increase from the previous quarter. Analysts were hoping for more significant numbers, leading to concerns that the company might face its first annual drop in deliveries after years of rapid growth.
Amid intensifying competition and cooling demand for electric vehicles, Tesla remains strong in the Chinese market, but is facing tough competition from other manufacturers like BYD. Moreover, Elon Musk's strategy to shift Tesla towards focusing on robotics and autonomous vehicles has been met with skepticism. During the recent robotaxi event, Tesla showcased several new concepts without revealing detailed functionality, resulting in a decline in its stock price that has not yet recovered.
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Tesla, Earnings, Reports