Tesla posts best quarterly revenue ever in last quarter with EV tax credit
Tesla reported earnings Wednesday after the bell.
The last quarter with the US government’s EV tax credit was a serious boon for Tesla.
The company posted its highest quarterly revenue ever, at $28.1 billion in the third quarter, coming in well ahead of Wall Street’s expectation of $25.3 billion. Earnings were $0.50, matching analysts’ forecast of $0.50, according to Bloomberg.
The stock, which is known to swing sharply after earnings, fell 1.1% after-hours.
The latest earnings come after Tesla sold a record number of vehicles in the third quarter, helped by customers who flocked to buy EVs en masse to take advantage of the $7,500 tax credits before they expired.
Of course, Tesla also accomplished the feat of record sales by offering huge discounts that ate into its profit margins.
Tesla’s automotive gross margin excluding revenue credits was 15.4% last quarter, down from 17.1% a year earlier. The analyst consensus was 16.3%, according to FactSet. For a longer-term comparison, that number was nearly 30% for the third quarter of 2021.
As a countermeasure to the end of the government’s tax credit, Tesla earlier this month unveiled its long-awaited more affordable vehicles, in the form of lower-trim versions of its Model 3 and Model Y. These “Standard” models cost about $5,000 less than previous versions, but also have a lot fewer features, with the intention of increasing sales volume as a way to drive overall revenue, though it’s likely that could eat into earnings.
Tesla reported $417 million in regulatory credits in the third quarter, down from $739 million a year ago. That number will likely decline going forward since there's effectively no longer a regulatory credit market in the US.
Tesla's overall net income dropped to $1.4 billion, down 37% from a year earlier, as operating costs soared: R&D expenses jumped 57%, and selling, general and administrative expenses climbed 32%.
On the earnings call this evening, investors are keen to hear updates about Tesla’s robotaxi expansion and Optimus robot development, where CEO Elon Musk says most of the company’s value lies.
