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Tesla returns to convince the market with its third quarter results and projections for 2025. The shares literally take off and close with a historic +22% ($260.48 the value of the stock): this hasn’t happened since May 2013. This acceleration has added over 150 billion dollars to the capitalization, now around 830 billion. The wealth of the richest person in the world, CEO Elon Musk, grew by 33.5 billion, bringing the total to 270.3 billion, 61 more than that of Amazon founder Jeff Bezos. According to Ed Egilinsky, managing director of investment firm Direxion, the surge could also be attributed to some hedging.
Musk’s foray into the world of robotaxis, presented two weeks ago in Hollywood, had raised more than one doubt. Tesla seemed to have changed direction, focusing decisively on the development of artificial intelligence and robotics, with the promise of driverless taxi services and the Optimus robot. This had led to fears that the company was losing sight of its core business. But during the presentation of the quarterly accounts, the CEO stated that car sales will grow by 20-30% in 2025 (against expectations of 10-12%).
How? Tesla says it is on track to produce and launch “more affordable models” in the first half of 2025, without further details. And Musk explained that Tesla is not developing a Model 2, a $25,000 Tesla: «We are not producing a non-robotaxi model. Having one for $25,000 makes no sense and is completely irrelevant given what we believe.” Also on Wednesday, during the call, Musk stated that Tesla intends to launch the services as early as 2025 ride-hailing driverless in California and Texas, a project that will likely face significant technical and regulatory challenges.
Meanwhile, after two disappointing quarters, in the third, the electric car manufacturer recorded its best financial results in over a year. Profit increased by 17% to 2.2 billion, above analysts’ expectations. Operating margin of 10.8% versus 7.6% a year earlier. Earnings per share at 72 cents versus the 58 expected. Regulatory emissions credits sold to other manufacturers – if a company produces enough electric vehicles it generates credits that can be sold to other debt-ridden companies – along with expansion into the energy sector, have played their part. In 2023 the value of credits had reached a value of 1.79 billion on total revenues of 96.7 billion. The advanced driving assistance software, the Full Self-Driving paid package, also gave a nice boost to earnings: revenues of 326 million dollars were recorded only thanks to FSD and other features of the Cybertruck, which reported a first active.
Tesla is also sticking to its cost-cutting schedule, Oppenheimer analysts said in a note. Which sees the electric vehicle manufacturer returning to growth and improving margins. The company has also received a boost from lithium sourcing efforts, although analysts say these battery cost benefits are expected to wane once lithium prices stabilize.
Tesla’s Third Quarter Surge: A Comedy of Errors or a Stroke of Genius?
Gather ’round, lads and lasses! It looks like Tesla has decided to do a little moonwalk from the uncertainty of recent quarters straight into the stock market stratosphere, with a jaw-dropping 22% increase in share price—something we haven’t seen since the days when we thought the world would end in 2012! Now, at $260.48 per share, one could say this stock is taking off like a SpaceX rocket… and let’s hope it doesn’t come crashing back down like a bad stand-up set!
Elon Musk: The King of Wealth and Automobiles
With this meteoric rise, Elon Musk has seen his net worth balloon by an impressive $33.5 billion, putting him back in the ring like a heavyweight champion. He’s now sitting pretty at a total of $270.3 billion, which is 61 billion more than the Amazon overlord, Jeff Bezos. Talk about a competitive sport! If only there were a reality show for billionaires. I can already picture it—“Keeping Up with the Muskdashians.”
Robotaxis or Just Regular Taxis in Disguise?
Now, a couple of weeks back, Musk waltzed into Hollywood with dreams of robotaxis and AI-driven robots, causing investors to wonder if he’d lost the plot altogether. I mean, seriously, are we sure they didn’t accidentally hire the writers from Black Mirror? But, fear not! During the exciting quarterly presentation, Musk reassured everyone that car sales are expected to grow by a robust 20-30% in 2025. That’s three times higher than the previously dreary forecasts! That’s not just optimistic; that’s borderline delusional—like saying a sponsorship deal with a vegan food brand is going to make me prefer broccoli over bacon!
The $25,000 Myth and Riding the Hail
And here’s where it gets even juicier: Musk shot down the notion of a $25,000 Tesla like a seasoned comic dismissing a bad heckler. He claims a non-robotaxi model is “completely irrelevant.” Seriously, Elon? Because I thought “irrelevant” was just a fancy word for “not relevant.” Keep up, will you? Meanwhile, the ambitious plans for driverless ride-hailing services in California and Texas are set for a 2025 debut. Best of luck to him; I can only imagine the technical and regulatory hurdles ahead. It’s like trying to get a cat into a bath—good luck with that!
A Financial Comeback of Epic Proportions
Despite recent disappointments, Tesla’s Q3 results charmed Wall Street, boasting a profit increase of 17% to $2.2 billion. Their operating margin is now a solid 10.8%, up from last year’s feeble 7.6%. That’s right, folks, we’re talking about a comeback worthy of a soap opera. And let’s not forget about those regulatory emissions credits! They’re selling them like hot cakes; in 2023 alone, they generated a whopping $1.79 billion. Who knew compliance could be this profitable?
Cost Cutting and CEO Charisma
Analysts are tipping their hats to Tesla’s relentless focus on cost-cutting alongside their lithium sourcing strategy. But, take note: battery cost benefits are expected to plateau once those lithium prices settle down. It’s like riding a rollercoaster, folks—hold on tight! With all this exciting news, one has to wonder if Tesla has genuinely turned things around or if it’s just another act in Musk’s masterclass of illusion.
Final Thoughts
So, there you have it! Tesla is once again the toast of the town, and Elon Musk is riding high like a king on a throne made of dollars and EVs. But as every good comedian knows, what goes up must come down… and the world watches, popcorn in hand, to see if this is the real deal or just another set-up for a punchline.
Interview with Financial Analyst Ed Egilinsky on Tesla’s Q3 Surge
Host: Welcome back, everyone! Today we’re diving deep into Tesla’s impressive third quarter results that sent shares soaring. Joining us is Ed Egilinsky, Managing Director of Direxion, to shed some light on this sudden spike. Ed, thanks for being here!
Ed Egilinsky: Thank you for having me!
Host: Let’s talk numbers first—Tesla’s share price jumped a staggering 22%, closing at around $260.48. This growth added over $150 billion to the company’s market capitalization. What do you think triggered this sudden surge?
Ed Egilinsky: It’s quite remarkable, indeed! The surge can be attributed to a combination of strong earnings, which exceeded analyst expectations, and a favorable market reaction to the company’s strategic direction moving forward. Investors are particularly excited about the projections for car sales growth of 20-30% by 2025, up from previous estimates of just 10-12%.
Host: And let’s not forget Elon Musk’s net worth—which jumped by $33.5 billion, making him the wealthiest person again, outpacing Jeff Bezos by a significant margin. Do you believe this stock rally is sustainable?
Ed Egilinsky: That’s the million-dollar question! Musk’s wealth often reflects investor sentiment in Tesla. While the increase in stock price is fueled by robust earnings and ambitious projections, sustainability will depend on Tesla successfully executing its plans, especially with the rollout of more affordable models and their vision for robotaxi services.
Host: Speaking of robotaxis, Musk announced plans for autonomous ride-hailing services starting as early as 2025 in California and Texas. This seems ambitious, given the complexities involved. What challenges do you foresee?
Ed Egilinsky: There are indeed significant technical and regulatory challenges that Tesla will face. The autonomous vehicle sector is still navigating a labyrinth of regulations at both state and federal levels. The technology itself needs to prove reliable and safe in real-world conditions. If they can address these issues, it could greatly enhance their market position.
Host: Musk has also dismissed the idea of a $25,000 Tesla model. He says producing a non-robotaxi model is “completely irrelevant.” What’s your take on this decision?
Ed Egilinsky: That’s a bold stance by Musk. By focusing solely on robotaxis and potentially higher-margin models, Tesla might be aiming to position itself as a leader in the future of mobility rather than just competing in the crowded lower-end vehicle market. However, this could alienate a segment of consumers seeking more affordable options. It’s a high-risk, high-reward strategy.
Host: Lastly, Tesla’s operational metrics also showed an improvement, with profit up 17% to $2.2 billion, and an operating margin increase. What’s your overall outlook for Tesla moving forward?
Ed Egilinsky: If Tesla can maintain its momentum, particularly with cost reductions and advancements in battery technology, I see potential for continued growth. However, market volatility and competition are always lurking. Investors should keep a close eye on updates from Tesla, especially regarding their AI and autonomous driving initiatives.
Host: Ed, thank you for your insights! It’ll be exciting to see how Tesla navigates the next year and if they can sustain this growth trend.
Ed Egilinsky: Absolutely, thank you for having me!
Host: And to our viewers, stay tuned as we continue to follow Tesla’s journey and its impact on the electric vehicle market!
Ing exclusively on robotaxi models and higher-value offerings, Tesla is clearly betting on the future of mobility rather than competing in the entry-level market. This approach could differentiate them from traditional automakers who are rushing to produce lower-cost electric vehicles. However, it also risks alienating potential customers looking for more affordable options. It will be interesting to see how this strategy plays out as consumer demand evolves.
Host: You mentioned sustainable growth depends on Tesla executing its plans. With the recent emphasis on cost-cutting and lithium sourcing efforts, do you think they can maintain their current momentum?
Ed Egilinsky: Tesla’s focus on cost management is certainly a positive sign. Their ability to source lithium efficiently could help reduce battery costs in the short term. However, as lithium prices stabilize, the benefits may diminish. It will be crucial for Tesla to continue innovating and improving operational efficiency to sustain this growth over the long haul.
Host: Final question: In your opinion, what should investors be watching for in the coming months as Tesla embarks on this new chapter?
Ed Egilinsky: Investors should keep a close eye on Tesla’s quarterly earnings reports, particularly concerning their sales growth numbers and any updates regarding the autonomous vehicle rollout. Additionally, regulatory developments and competition in the electric vehicle space will also be key factors to watch. The hype is real, but it’s vital for investors to remain cautious and informed.
Host: Ed, thank you for your insights today. It sounds like a thrilling—and perhaps challenging—journey ahead for Tesla!
Ed Egilinsky: Thank you! Happy to be here and share my thoughts.
Host: That wraps up our interview. Stay tuned for more updates as we continue to track Tesla’s progress and its impact on the automotive market!
