Tesla’s electric vehicle (EV) production costs reached an all-time low in the third quarter of 2024, further boosting the company’s profitability. The average production cost per Tesla vehicle was reported at $35,100—down 6% from the same quarter last year—allowing the company to achieve substantial gains in efficiency and earnings.
Tesla Reports Record Profits Amid Cost Reductions
On October 23, Tesla revealed its third-quarter earnings report, showcasing a profit of $2.5 billion, up 8% compared to the same period last year. This profit exceeded analysts’ expectations, contributing to a 9% increase in Tesla’s share price in after-hours trading.
The impressive financial performance can be attributed to significant cost-cutting efforts. Tesla’s average cost to produce each vehicle dropped by $2,400 year-over-year, reflecting a commitment to operational efficiency. CEO Elon Musk is optimistic about Tesla’s future, projecting a 20-30% rise in vehicle sales in 2025.
“No electric car company is profitable—no electric car division is profitable, to my knowledge,” Musk commented, emphasizing Tesla’s unique achievement in a fiercely competitive auto industry.
Cybertruck and New Product Lines
In addition to its core lineup, Tesla’s Cybertruck electric pickup truck turned a profit for the first time this quarter. However, the model has encountered challenges, the most recent being an issue with the rearview camera, which led to a recall of 27,000 Cybertruck vehicles across the U.S. earlier this month.
Tesla continues to expand its portfolio, with a new, more affordable EV model set for release in mid-2025. This anticipated model is expected to appeal to a broader audience and drive even greater market share.
Increased Revenue from Carbon Credits and Energy Products
Tesla’s third-quarter revenue reached $25.18 billion, up from $23.35 billion during the same period in 2023. A significant portion of this revenue came from Tesla’s carbon emissions credit sales, which rose by 33% year-over-year to $739 million. These credits are commonly purchased by traditional automakers to comply with regulatory standards for clean-fuel vehicles, underscoring Tesla’s critical role in the transition to sustainable energy.
Excluding carbon credit sales, Tesla’s gross margin from its automotive segment reached 17%, an increase from 14.6% in the second quarter, reflecting solid growth in Tesla’s core business.
Additionally, Tesla reported a surge in revenue from solar panels, batteries, and other energy-related products, with this segment generating $1.5 billion—double what it brought in during the same period last year. This diversification demonstrates Tesla’s broadening impact on sustainable energy solutions beyond electric vehicles.
Tesla’s Path Forward
Tesla’s steady advances in cost management and product diversification are positioning it strongly for future growth. As the global leader in EV technology, Tesla’s continuous innovation is drawing investor confidence and boosting market performance. With a lower-cost model on the horizon and ongoing developments in energy products, Tesla is set to shape the EV industry and the global transition to sustainable energy.
