Tesla says “more affordable” electric vehicles will hit the market in early 2025

“To further accelerate the global transition to sustainable energy, we must make electric vehicles affordable for everyone and make the total cost of ownership per mile competitive with all modes of transportation,” the company said. “Preparations are still ongoing for our range of new vehicles – including cheaper models – which we will bring to market in the first half of 2025.”

The company said it had net income of $2.2 billion on revenue of $25.2 billion. That represents a 7 percent year-over-year increase in revenue compared to $23.4 billion in the third quarter of 2023 and a 17 percent increase in net income, slightly beating expectations. Analyst consensus predicted Tesla's quarterly profit would fall 9 percent in the third quarter while revenue would rise 9 percent, according to FactSet.

The company's revenue from purchasing regulatory credits from other companies continued to perform strongly. Tesla said it was its “second-highest quarter of regulatory credit revenue as other OEMs continue to lag behind in meeting emissions requirements.”

The company's gross margins were once again in the spotlight as optimistic investors hoped for improvement after months of steady decline. Sharp price cuts and falling demand, as well as cheaper financing, have pushed the company's once-vaunted margins to their lowest level in six years.

Still, there were some positive signs of recovery. The company reported a gross margin of 19.8 percent based on generally accepted accounting practices, slightly higher than the 18 percent reported last quarter and a slight increase from the third quarter of 2023.

The gains came after Tesla reported a smaller-than-expected increase in deliveries in the third quarter, causing its stock price to plunge. The company said it delivered 462,890 vehicles to customers in the quarter, an increase of 6.3 percent compared to the second quarter of 2023. However, analysts had expected more deliveries and now worry that the company could be headed for its first annual decline in deliveries after years of rapid growth.

Tesla is struggling with increasing competition and falling demand for electric vehicles. The company's vehicles are still selling well in China, but Tesla still faces stiff competition from BYD and others in the world's largest electric vehicle market.

Meanwhile, Elon Musk's attempts to transition the company to selling robots and autonomous vehicles are met with widespread skepticism. Tesla unveiled several eye-catching concepts at its Robotaxi event earlier this month, but declined to share details about how the technology works. The company's stock price plummeted after the incident and hasn't really recovered to this day.