Tesla releases third-quarter financial report, deliveries exceed market expectations

Tesla (NASDAQ: TSLA) will announce its third-quarter financial report today, with the market set to learn about its financial status after Wednesday's close. Tesla reported deliveries after the end of the third quarter, significantly surpassing Wall Street's expectation of around 462,000 vehicles, ultimately delivering 486,532 vehicles. Although this represents a notable increase, it is a 2.1% decline compared to the same period last year. Energy storage deployments reached 13.7 GWh, showing year-on-year growth. With demand appearing strong, Tesla showrooms had cleared out before the end of the third quarter.

For this quarter, analysts have compiled forecasts for Tesla's report due after market close today: Total revenue: US$28.34 (approximately HK$221)B (approximately HK$221.8 billion), non-GAAP earnings per share: US$0.43 (approximately HK$3), operating margin: 2.5%, operating income: US$721 (approximately HK$5,624)M (approximately HK$5.62 billion), free cash flow: approximately -US$4.51 (approximately HK$35)B (approximately HK$35.2 billion).

Analyst Predictions and Key Focus Areas

During the conference call, we expect to hear several key points: automotive gross margins and overall profitability. The gross margin for the second quarter was 16.3%, down from 19.2% in the first quarter, affected by warranty costs and some minor regulatory credits. The market consensus predicts an overall gross margin close to 18%, but failing to meet this target could heighten concerns about pricing pressure on its vehicles. Additionally, attention will be on the profitability of energy storage, especially since Tesla did not meet GWh expectations, despite still having a strong quarter.

Investor Questions and Areas of Concern

Questions from retail investors typically focus on the progress of Robotaxi/Cybercab, unsupervised FSD, and Optimus, and this quarter is no exception. Key areas of interest include expanding the Cybercab fleet beyond Austin, the timeline for unsupervised FSD in customer vehicles, the unit economics of Robotaxi, and the unit costs of Optimus and when it will start generating revenue. Any specific timelines or details on regulatory pathways could significantly impact stock prices, more so than recent financial figures.

Speculation regarding a merger with SpaceX was detailed during SpaceX's earnings call last night and may resurface, although key details were shared then. Elon Musk confirmed the steps toward a merger between Tesla and SpaceX that investors are anticipating.

Here are some questions investors may raise: How will the Cybercab fleet expand beyond Austin, considering NHTSA's safety review, and what is the regulatory pathway? When can we expect unsupervised FSD in customer vehicles? When will Cybercab be available for customers to purchase/own? What are the unit economics of Robotaxi per mile, and how does it compare to the thirty-cent target? Tesla has acknowledged that HW3 vehicles cannot support unsupervised FSD; when will owners know if they can upgrade their hardware for free, and when will a clear plan be provided?

The complete earnings call will be live-streamed tonight at around 5 PM after the market closes.

Market Focus Ahead of Tesla's Earnings Report

Tesla's third-quarter earnings report is imminent, with deliveries exceeding expectations indicating strong demand, but changes in gross margins have raised market concerns. With growth in energy storage, Tesla needs to balance profitability and cost control. Investor expectations regarding future product developments, particularly Robotaxi and unsupervised FSD, may influence stock price trends. These factors make this quarter's earnings report not just a presentation of numbers, but a litmus test for market confidence.