"CEO Elon Musk assures that Tesla will launch more affordable vehicles in the first half of next year."
After reporting increased revenue and income that boosted Tesla's stock in after-hours trading—making Elon Musk even wealthier—the CEO is promising significant advancements in self-driving technology to support the company's growth of 20% or more in 2025.
“We’re on track to deliver lower-cost vehicles,” Musk stated during a conference call with investors and analysts following the release of Tesla’s third-quarter financial results. He estimated that vehicle sales could grow by 20% to 30% next year.
Tesla’s revenues rose by 9% in the third quarter, with much of the increase attributed to its energy and storage-battery businesses, as well as services. Automotive sales only grew by 2%, and a substantial portion of the 17% rise in profits also came from these sectors.
The company reported total gross margins of 19.8%, with Tesla Energy achieving a record gross margin of 30.5%, positively impacting overall margins.
Recently, Tesla has introduced zero-percent financing for Model 3 and Model Y purchases in the U.S., alongside increasing inventory discounts.
Despite a year-over-year decline in order volumes for Q3, Musk expressed enthusiasm about the company’s performance. “Tesla has achieved record deliveries. To my knowledge, no other EV company is even profitable. There are no profitable EV divisions within existing auto companies,” he noted.
Musk believes the strong performance in Q3 sets the stage for future growth, mentioning that the autonomous Cybercab, unveiled earlier this month, is expected to enter volume production in 2026, with a target of at least 2 million units annually.
Plans for new, more affordable vehicle models are on schedule for production to begin in the first half of 2025. Musk highlighted that the refreshed Model 3 ramp-up has been successful, with higher production and reduced costs.
Production of the Cybertruck has increased and achieved a positive gross margin for the first time. Musk also mentioned that the new Semi-Truck factory should be operational by the end of 2025, emphasizing that any company not adopting battery-powered semi-trucks will be at a disadvantage, particularly in terms of driver fatigue and safety.
While some automakers have scaled back their autonomous driving commitments, Musk asserted that the Cybercab will usher in a more prosperous era for Tesla.
He added that the adoption rate for Full Self-Driving (FSD)—through purchases or subscriptions—has “improved substantially,” generating $326 million in FSD revenue in Q3. Significant advancements in FSD technology are expected, with Musk estimating it will be safer than human drivers by Q2 next year.
“Cars like the Model 3 and Model Y may look normal, but they have the AI capability to drive themselves,” he said. Tesla plans to offer more opportunities for the public to experience its advancements through trial periods following software updates.
Musk anticipates rolling out ride-hailing services in California, pending regulatory approval, as well as in Texas and other states. “I predict Tesla will become the most valuable company in the world by a significant margin,” he stated.
To address concerns about service wait times, Tesla is expanding its network by opening 70 new locations and doubling its existing service facilities. “We make cars and we service cars,” Musk concluded.