Credit：Tesla
The Shanghai factory remains on track to begin shipping Megapacks in the first quarter of 2025, Tesla said in a report of quarterly financial results Wednesday. According to the results, Tesla’s Energy Generation and Storage business achieved a record gross margin of 30.5% in the quarter ended September, a quarter-over-quarter (QoQ) increase of 596 basic points (BPs), despite lower Megapack volumes.
The rise in margin of the energy business helped drive Tesla’s earnings beat that quarter. The non-GAAP diluted earnings per share (EPS) gained around 9.1% year-over-year (YoY) to $0.72 for the third quarter, whereas analysts projected $0.6 with a YoY decrease of 9.1%. The operating income surged YoY 54% to $2.72 billion, compared with analysts estimated $19.6 billion. The operating margin increased 323BPs from a year ago to 10.8%, topping analysts’ expectation of 8%.
Tesla said the profitability continued to be weighed by reduced vehicle average selling price (ASP) amid the price war at the EV sector. In addition to the gross profit growth of the energy business, the profitability was also buoyed by lower cost per vehicle, including lower raw material costs, freight and duties and other one-time charges, higher Full Self-Driving (FSD) software revenue recognition for releases related to Cybertruck and certain features such as Actually Smart Summon, increase in vehicle deliveries and higher regulatory credit revenue.
"Refreshed Model 3 ramp continued successfully in Q3 with higher total production and lower cost of goods sold quarter-over-quarter. Cybertruck production increased sequentially and achieved a positive gross margin for the first time," Tesla said in its report.
Tesla re/confirm/ied its plan to produce its sub-$30,000 EV, dubbed the Model 2. Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025, the company said.
Tesla posted delivery of 462,890 units for the third quarter with a 6.4% YoY increase, the first rise in a year. It still expected the deliveries this year will achieve slight YoY growth despite ongoing macroeconomic headwinds. The forecast requires Tesla to deliver more than 510,000 vehicles for the current quarter, a new quarterly record that is set to be 30,000 units higher from a year ago.
Tesla CEO Elon Musk even predicted on an earnings call the deliveries next year could grow by 20% to 30%e, though he couched it as a "best guess." Musk told analysts Cybercab, a prototype of Tesla’s long-awaited Robotaxi, will reach volume production in 2026, with an aim to at least 2 million per year, and “maybe 4 million ultimately.”
Tesla broke ground on a factory in Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone on May. The new plant spans an area of approximately 200,000 square meters, with a total investment of around RMB1.45 billion, or more than US$200 million.
Tesla’s Megapack battery factory has been under rapid construction since then. As of the end of September, more than 60% of the main plant building has been completed, and the factory is expected to put into production in the first quarter of 2025.
The mega factory is the first of its kind built by Tesla outside the United States and the company's second plant in Shanghai, following the inauguration of its Gigafactory in 2019 which involved an initial investment of over RMB50 billion.
The factory plans to produce 10,000 Megapacks, or large-scale rechargeable lithium-ion battery stationary energy storage products, annually, with a total storage capacity of nearly 40GWh. The new factory aims to supply the global market and further establish Chinese intelligent manufacturing as a prominent brand on the international stage, Tesla said.
