The Frontline | Tesla's Q3 earnings exceed expectations, and the cost per vehicle sold drops to the lowest level in history.

After the production of its 7 millionth vehicle, Tesla's financial reports have shown improvement.

On October 24th Beijing time, Tesla released its financial report for the third quarter of 2024. In the third quarter, it achieved an operating income of 25.182 billion US dollars, with an 8% year-on-year growth; the net profit reached 2.167 billion US dollars, with a 17% year-on-year growth and a 46.6% quarter-on-quarter growth. The day after the release of the financial report, Tesla's stock price in the US stock market soared by 21.92%.

After experiencing a double decline in revenue and profit in the first quarter, and an increase in revenue but not in profit in the second quarter, Tesla's profit in the third quarter returned to a growth range, which is inseparable from the improvement of the basic automotive business.

In the first two quarters of this year, Tesla's delivery volume continuously declined year-on-year, and profits also continued to decline. In the third quarter, this situation improved. Tesla sold 462,000 vehicles globally, with a 6.4% year-on-year growth and a 4.3% quarter-on-quarter growth.

While the delivery volume increased, Tesla also pointed out that its cost per vehicle sold has dropped to the lowest level in history, about 35,100 US dollars. Tesla's Chief Financial Officer Vaibhav Taneja explained that this is due to the reduction in raw material costs, freight, tariffs, and other one-time expenses, as well as the implementation of the company's cost reduction and efficiency improvement measures.

The return of profit is also attributed to the contribution of carbon credits. After reaching a record 890 million US dollars in the second quarter, Tesla earned 739 million US dollars from selling carbon credits in the third quarter, the second-highest in history.

With the increase in sales volume, the reduction in costs, and the income from selling carbon credits, Tesla's gross margin in the third quarter reached 19.8%, with a 1.95% year-on-year growth. The gross margin of the automotive business rose to 17.1%, and many indicators were higher than the previous market expectations.

Of course, the return of the gross margin to positive growth is also inseparable from the contribution of layoffs. Since April this year, Tesla announced a global layoff of 10%, but the final layoff rate was between 15% and 20%. Dozens of executives left the company during this layoff turmoil, including Drew Baglino, Senior Vice President of Energy and Powertrain Systems, Vice President Rohan Patel, and Rebecca Tinucci, Senior Director in charge of Supercharging.

Public information shows that as of the end of 2023, Tesla had a total of 140,500 employees worldwide. Based on this number, the layoff exceeded 21,000 people. This is also one of the important reasons for Tesla's profit to return to a growth range.

However, the cost reduction brought by layoffs is obviously a one-time income and is difficult to sustain. Tesla needs new vehicles to explore more markets. At the performance meeting, Tesla CEO Elon Musk also brought more news about new vehicles.

"Tesla plans to launch a more affordable model in the first half of next year. When Tesla's low-cost electric vehicle model is launched, the unit price will be less than 30,000 US dollars. Tesla will not produce low-cost vehicles without an unmanned driving version. The conventional 25,000 US dollar electric vehicle will not be competitive."

In addition to the low-cost model, 36Kr previously learned that the refreshed Model Y and the six-seater version specially for the Chinese market will also be launched next year. With these new models, Musk also gave the growth range of car sales in 2025 at the performance meeting: 20% - 30%.

In the first three quarters of this year, Tesla delivered a total of 1.293 million vehicles globally. In the fourth quarter, it needs to deliver more than 510,000 vehicles to reach the level of 1.8056 million vehicles last year. And the goal of a 20% - 30% growth in 2025, based on 1.8 million vehicles, means that Tesla needs to deliver at least 2.16 million new vehicles, which is a very challenging number.

However, it is worth noting that the Cybertruck exceeded expectations and achieved its goals. In the third quarter, the Cybertruck has become the third-best-selling electric vehicle model in the United States, after the Model Y and Model 3.

The Cybertruck has achieved a positive gross margin, reaching the company's goal of making the model profitable by the end of 2024 ahead of schedule. In the future, with the continuous increase in deliveries, the Cybertruck will also contribute considerable sales and profits to Tesla.

Regarding the previous brief Robotaxi launch event, at this performance meeting, Musk also mentioned more information. He said that Tesla has developed a ride-sharing application and is expected to launch a travel service to the public in Texas and California next year. Currently, Tesla has provided this service to employees in the Bay Area.

For the Cybercab, Musk is as confident as ever. He said that the model will be mass-produced in 2026. Tesla's goal is to produce at least 2 million Cybercabs per year, and eventually it may reach an annual production of 4 million vehicles.

In terms of computing power data, the third-quarter report shows that currently, Tesla's computing power is approximately equivalent to 67,500 Nvidia H100 chips (67.5 EFLOPS computing power), and it is expected to add another 21,000 H100 by the end of October, with the total computing power reaching 88.5 EFLOPS.

In addition, in the third quarter, Tesla's free cash flow was 2.7 billion US dollars, and cash and investments increased by 2.9 billion US dollars quarter-on-quarter to 33.6 billion US dollars. According to the performance meeting, Tesla increased its artificial intelligence training computing power by more than 75% in the third quarter.

As of the third quarter, Tesla's FSD (Full Self-Driving Capability with driver supervision) has accumulated a driving mileage of more than 2 billion miles, of which more than 50% was achieved on the V12 version.

Musk also announced that the FSD V13 version is about to be released. Compared with the V12.5 version, the expected intervention interval mileage is expected to increase by 5 - 6 times. Currently, the internal expectation is that by the second quarter of next year, Tesla's FSD intervention interval mileage will be longer than that of humans.

Tesla has also proved the safety of autonomous driving with data. It released the vehicle safety report for the third quarter, which shows that when using Autopilot, an accident occurs only after an average driving of 7 million miles. Musk said, "Our current safety level is 10 times higher than the average level in the United States."