Tesla (NASDAQ: TSLA) Inc.’s ten-quarter record of exceeding profitability estimates ended on Thursday when the firm revealed lower-than-expected earnings for the third quarter of 2023. Earnings per share (EPS) for the electric vehicle (EV) maker were 66 cents, a significant reduction from last year’s $1.05 and below the Zacks Consensus Estimate of 72 cents.
Tesla’s Revenue Misses Expectations Despite Record Sales and Incentives
Despite a 9% year-over-year (YoY) revenue increase to $23,350 million, Tesla fell short of the average projection of $24,381 million. This poor performance resulted in a 4% reduction in the company’s stock during after-hours trading, as well as lower gross and operating margins.
Despite taking advantage of incentives such as a full $7,500 federal tax credit under the Inflation Reduction Act for all trims of Model 3/Y vehicles in the United States, Tesla’s domestic EV market share fell from 60% in Q1 to 50% in Q3. Tesla, on the other hand, remains enthusiastic about its delivery growth objective of around 50%, forecasting 1.8 million units delivered in 2023.
Tesla’s Q3 2023 Performance: Record Deliveries, Revenue Growth, and Cash Position
In the third quarter, the firm manufactured 430,488 units (416,800 Model 3/Y and 13,688 Model S/X), an increase of 18% year on year. During this time, it delivered 435,059 automobiles, a 27% increase year on year. Notably, Model 3/Y deliveries were 419,074 automobiles, a 29% increase year on year. In contrast, Model S/X deliveries were just 13,688 units, a 31% decrease year on year.
Tesla’s total automotive revenues increased by 5% year on year to $19,625 million in Q3. This total includes $554 million from the sale of regulatory credits for electric cars, representing a 93.7% rise year over year. Services and Other revenue increased 31.6% year on year to $2,166 million, mostly due to supercharging, insurance, and body shop & component sales.
Tesla’s financials showed $26,077 million in cash and cash equivalents as of September 30, 2023. During the quarter, the firm earned $848 million in free cash flow (FCF). Energy Generation and Storage revenues were $1,599 million in Q3 2023, up from $1,117 million the previous year owing to the ramp-up of the Megapack facility in California. However, due to high borrowing rates and the loss of net metering in California, solar deployments have fallen.
Net of the present part, long-term debt, and financing leases were $2,426 million. In the third quarter of 2023, net cash produced by operating activities was $3,308 million. Capital expenditure totaled $2,460 million in the quarter under review. The automotive gross profit was reported at $3,668 million while energy storage deployments increased by 90% YoY to 4 GWh.
