Tesla stock spikes over 20% on strong margins and 2025 guidance
Today at 01:12 PM
Tesla stock (NASDAQ: TSLA) spiked big on the company’s strong earnings call on Wednesday evening that detailed strong margins and better guidance in 2025 that should resume growth year over year.
At the time of writing, Tesla shares were up over 20 percent.
Tesla said in its Q3 2024 Shareholder Deck that its Cost of Goods Sold Per Vehicle (COGS) had come down to its lowest in company history. It now costs just ~$35,100 for Tesla to build a car, increasing its margins to 19.8 percent and its operating margin to 10.8 percent, up from 18 percent and 6.3 percent, respectively.
Wedbush analyst Dan Ives said the big story of the Q3 Earnings report was the margins, now bolstering a strong signal of what investors wanted to see:
“The whole story is about gross margin. Showing the worst is in the rearview mirror…that gross margin is a goldilocks for any bull. The bears, it’s a nightmare for.”
Investors were also happy to hear Tesla is prepping 2025 for the year it will resume a sizeable growth rate in terms of deliveries. Although the company is on track to be about level with 2023 at 1.8 million, CEO Elon Musk said during the call last night that 2025 will look a lot different:
"Something like 20% to 30% growth next year is my best guess.”
This will mostly be due to the company’s focus on launching several affordable models in the first half of 2025, which the company detailed in the Shareholder Deck. These vehicles are still yet to be unveiled, but they will be built upon a next-gen platform.
The quarterly call was one of the strongest in recent memory, as Tesla has routinely dealt with questions surrounding its Robotaxi plans and other inquiries regarding its stagnant growth rate, which it said would happen at the beginning of the year.
Now that 2025 is approaching, Tesla can start to look forward with better margins and profitability, especially now that Cybertruck, which is less than a year into deliveries, is already making the company money.
Tesla is trading at $256.88 at 1:09 p.m. EDT.
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