The Elon Musk-led company described its results as “a multi-level record quarter,” with revenue up 39% from a year ago to $ 8.77 billion, beating estimates analysts of $ 8.3 billion. Net income rose 131 percent to $ 331 million.
The regulatory credit sale – in which Tesla sells zero-emission credits from various governments to other automakers – accounted for $ 397 million in revenue, supporting its revenue. In the previous quarter, $ 428 million in revenue from those credits was the main reason it was left in the dark despite widespread expectations of a loss.
The Fremont, Calif.-Based company also said gross margins rose 4.62 percentage points from a year ago to 23.5%, ahead of estimates of 19.75%. It recorded $ 579 million from energy storage sales – up 44% from a year ago – while service revenues rose 6% to $ 581 million.
Tesla stock gained 2.5% on Wednesday after hours.
“The market was expecting substantial growth in earnings per share and free cash flow and Tesla delivered both,” said Nicholas Hyett, analyst at Hargreaves Lansdown, referring to Tesla’s free cash flow of 1, $ 4 billion.
Tesla said it intends to implement “more ambitious architectural changes” to both its products and factories, with the goal of “improving manufacturing costs and efficiency.”
“We are also expanding our manufacturing scope to include additional areas of outsourcing,” Tesla said, referring to plans announced last month to manufacture battery cells in-house.
Tesla’s share price took a wild ride during the July-September quarter. On July 1, it overtook Toyota in market value to become the world’s most valuable automaker at $ 205 billion, baffling many analysts given that the Japanese group builds 20 times as many vehicles a year. By the end of August, its share price had again more than doubled to give it a valuation of $ 465 billion. By the end of the quarter, it had fallen again to $ 400 billion – up 452% from the start of the year.
Tesla had previously reported third-quarter vehicle deliveries of 138,300, a company record that marked a 43% gain from the previous year and was slightly ahead of estimates. The vast majority of vehicles were the cheaper Y and 3 models, as the high-end S and X models made up only 15,200 of the total.
Alyssa Altman of Publicis Sapient said the 44% jump in energy storage sales – which includes the sale of home battery power supplies that connect to solar panels – offered investors hope that Mr Musk could realize his long-term ambition for Tesla to be a leader in multiple markets beyond just vehicles.
“Everyone knows Tesla as an electric car company, but they’re going to continue to make products around energy,” she said.