Tesla Beats Q3 Earnings Estimates, Updates Capex Guidance and Robot Production
Tesla's Q3 earnings surpassed estimates, showing positive cash flow and an upgraded capex forecast, while deliveries slightly declined.
Tesla reported third quarter earnings that beat analysts’ expectations, posting revenue of $28.05 billion, slightly below the consensus estimate of $28.13 billion. The company’s adjusted earnings per share (EPS) stood at $0.48, surpassing the projected $0.44.
Free cash flow for the quarter was reported at $1.53 billion, significantly higher than analysts’ expectations of a loss of $4.92 billion. Capital expenditures totaled $4.732 billion, considerably less than the anticipated $7.96 billion.
During the earnings call, Tesla’s Chief Financial Officer Vaibhav Taneja mentioned that the company had updated its full-year capex guidance from $25 billion to $20 billion, attributing this reduction to more efficient management of capital deployment. CEO Elon Musk commented on the capital spending plans, stating, “Capex is actually ending up being a little lower than we anticipated, but we’ll start to become more meaningful next year.”
In addition to financial results, Tesla announced that production of its Optimus robot began at the Fremont factory. The company expressed confidence in the current manufacturing process for Optimus, stating it is suitable for commercial production. Musk estimated that achieving an annual production rate of 1 million units might take a little over a year.
The demand for Tesla vehicles was reportedly driven primarily by its full self-driving (FSD) offerings, with Musk noting that the Cybercab fleet in Austin has grown significantly. He remarked, “The biggest driver of demand is full self-driving.”
On the regulatory front, Tesla’s Cybercab service, launched on September 3 in Austin, faces scrutiny from the National Highway Traffic Safety Administration (NHTSA), which has issued a special order with inquiries regarding the vehicle’s compliance with safety standards. Tesla requested an extension for their responses but was granted a 30-day extension instead, making answers due by October 30.
During the call, Musk briefly mentioned a possible merger between Tesla and SpaceX, stating that discussions are ongoing through special committees formed at the request of shareholders, though he noted, “I don’t think we should necessarily assume that a SpaceX and Tesla merger is a certainty.”
Tesla also revealed its much-anticipated Roadster last week; however, critics have questioned its market viability.
