Turning a lacklustre 2024 on its head, Tesla (TSLA:NASDAQ) delivered stronger third-quarter profits than Wall Street expected after the close on 23 October 2024. Elon Musk’s electric vehicle maker reported its first year-on-year bottom line growth of 2024 to the delight of investors, sparking a 22% rally in the share price, its biggest one-day jump in more than a decade.

The share price rally added more than $80 billion to the company’s market capitalisation, taking the gain for the year to close on 6%, and helped power the Nasdaq Composite Index to within a fraction of an all-time high.

The announcement gave analysts and investors plenty to chew over, from a third-quarter profit beat and strong deliveries to an improved growth outlook, low-cost electric vehicle update, and Robotaxi rollout, but it was the margin story that prompted most of the positive remarks across Wall Street.

‘We saw this all-important metric [automotive gross margins ex credits] spike back to 17.1%, handily beating the Street’s estimate at 15.1% and now appearing to be on a trajectory back into the 20% level in the second half of 2025,’ wrote Wedbush in a note to clients.

Tesla delivery growth for 2025 of 20% to 30% beat consensus forecasts of 10% to 12% heading into the print, the note added. Tesla chief executive Musk touted a myriad of growth drivers for the electric vehicle maker over the next few years. These included a more affordable sub $30,000 model, autonomous and full self-driving and AI strategy rolled out, further plans to reduce costs, Cybercab production and Semi adding to the company’s product portfolio and growing energy and storage business adding to the Tesla growth story.

Yet sceptics will be wary of buying the entrepreneur’s hype given his record for wild predictions in the past failing to materialise. In 2014, Musk promised Tesla vehicles would be capable of driving themselves within six years, and two years later he predicted a Tesla would drive itself from Los Angeles to New York without driver intervention within 12 months. In May 2022, Musk claimed that achieving full autonomy was Tesla’s ‘number one priority’, while on the same earnings call admitting that full self-driving ‘was one of the hardest problems ever’.

Investors are still waiting for Tesla to bag the regulatory approvals it needs to get its full self-driving technology used on roads in the US, unlike Google-owned Waymo, Alphabet’s (GOOG:NASDAQ) robotaxi service which already offers autonomous rides to ordinary people in San Francisco, Los Angeles, Phoenix and is launching services in Atlanta and Austin.

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