DETROIT, MI (AP) — Tesla reported on Wednesday that its 3rd quarter earnings more than doubled from the previous year, owing to increased vehicle sales.
From July to September, the Austin, Texas-based electric vehicle as well as solar panel manufacturer earned $3.29 billion in net income.
Elon Musk, Tesla’s CEO, stated during the company’s quarterly conference call that the company is contemplating a $5 billion to $10 billion stock buyback next year, regardless of whether the economy falters.
In addition, Musk stated that Tesla’s “Full Self Driving” feature will not be ready for use without individuals behind the wheel this year. But it’ll be available next year “without a doubt in my mind.”
As per data provider FactSet, Tesla earned $1.05 per share exclusive of special items, battering Wall Street forecasts of $1 per share. Revenue increased 56% to a record $21.45 billion, falling just short of projections of $21.98 billion.
Tesla will come up short of its target of 50% yearly growth in vehicle shipments this year, according to Chief Financial Officer Zachary Kirkhorn, who was later refuted by Musk.
“On the delivery side, we do anticipate to be just under 50% growth,” he said, attributing the deficit to expected transportation issues at the end of the year.
Musk later predicted a 50% increase in annual manufacturing and delivery, but he also mentioned logistical issues with delivering vehicles. He then reaffirmed the growth goals.
“To the best of our understanding,” Musk said, “we believe that Tesla will keep growing deliveries as well as revenue, production at a 50% or higher annual compound growth rate.” Musk qualified his statement by saying that some years may be lesser, while others may be higher.
A strong fourth-quarter sales performance will be required to meet the 50% target.
Tesla announced earlier this month that automotive sales increased 35% from July to September versus the second quarter as the company’s massive factory in China overcame supply chain issues as well as pandemic restrictions.
In the third quarter, the car maker sold 343,830 cars and SUVs, in comparison to 254,695 deliveries from April to June.
Experts have queried whether Tesla is seeing a reduction in demand for its automobiles, which start at around $49,000 in the United States.
The company has shipped 908,573 vehicles so far this year. The company delivered over 936,000 vehicles last year.
To increase sales by 50% over last year, or approximately 1.4 million vehicles, the company would need to sell upwards of 490,000 vehicles in the 4th quarter.
However, Tesla stated that it had a greater number of vehicles in transportation at the end of the third quarter, which will be counted as sales once they arrive at customers. The company stated that it is adjusting its delivery schedule.
Tesla has stated that its “Complete Self Driving” system will be available to everyone who may have ordered it by the end of the year.
The system is currently being beta tested by 160,000 chosen drivers and will require human drivers until next year, according to Musk.
“We’re not saying it is rather ready for no one behind the wheel,” he said, adding that humans don’t often touch controls.
He claims that the company will be able to demonstrate to policy makers that the system is far safer than the ordinary human driver.
Musk pledged that a fleet of self-driving robotaxis would be operational by 2020, a closing date that has now been missed for 2 years.
Concerning the stock buyback, Musk stated that Tesla’s board has discussed the idea and generally believes it makes sense.
“We’re likely to do some meaningful buyback,” he said. Tesla has enough cash to pay for a buyback. According to the company, it had $21.1 billion in marketable securities and cash at the end of the third quarter.
Musk also expressed confidence that Tesla will meet US government requirements, allowing buyers to receive up to $7,500 in tax incentives per vehicle. The recently approved Inflation Reduction Act includes a $7,500 tax credit that can be used to offset the cost of buying an electric vehicle. To receive the full credit, the EV must have a battery made in North America that contains 40% of the metallic materials mined or recycled here on continent.
Tesla manufactures vehicles and batteries in the United States.
Profits were hurt by high prices for raw materials as well as inefficiencies from ramping up production plants in Germany as well as Texas, according to the company.
Tesla Inc. shares fell 6.3% in trading on Wednesday after the company’s 3rd quarter sales fell short of Wall Street expectations. The stock has dropped 37% thus far this year, weighed down by Musk’s $44 billion bid for Twitter.
Musk previously backed out of the deal, claiming that Twitter exaggerated the number of fake “spam bot” accounts on its platform. Twitter filed a lawsuit, and a Delaware judge has granted both parties until Oct. 28 to resolve the issues. Or else, a trial will be held in November.
Musk admitted during a teleconference on Wednesday that he along with other investors overpaid for Twitter. However, he appended that he believes Twitter’s “long-term potential, in my opinion, is an order of magnitude higher than its present value.”
