Although the electric carmaker is expanding quickly, investors are concerned that sales may slow due to higher interest rates and prices.
Tesla reported Wednesday a huge jump in its quarterly profit, as electric car sales soared over the three months ending in September.
The electric car maker reported that it earned $3.3 billion in its third quarter. This is more than $1.6 billion in a similar period last year and almost equals the record profit it reported in its first three months. It reported revenue of $21.5 million, an increase of $13.8 billion.
Tesla announced this month that it produced more than 360,000 cars in the third quarter. This is a 50% increase over the previous year. Although sales increased, investors are becoming more concerned about signs that might indicate that luxury car demand is waning.
Tesla sold about 20,000 fewer cars in the third quarter than it did in the previous quarter, and waiting times for its vehicles are falling. The automaker may be experiencing sales pressure due to the fact that it has increased prices sharply in recent months, and interest rates for car loans have risen sharply. This makes new cars even more expensive.
Wall Street analysts were disappointed with the company’s third-quarter profits. The stock fell about 4 percent during extended trading on Wednesday.
Jesse Cohen, an analyst with Investing.com said that Tesla’s terrible quarter was the latest indication that increasing macroeconomic uncertainty is having an impact on demand for electric vehicles. He said that the demand for Tesla’s electric cars in China, which is the largest market for them, was lower than expected due to rising competition from E.V.s. companies.”
Mr. Cohen stated that production problems at Tesla’s Berlin facility, which opened this year, could make achieving its goal to increase deliveries by 50% this year more difficult.
Elon Musk, Tesla’s chief executive dismissed worries about slowing demand in a conference call with analysts. He stated that every car he makes will be sold. He said that Tesla’s Berlin plant is currently producing 2,000 cars per week and that the Austin plant will soon be able to match this pace. Tesla manufactures cars in factories in Berlin and California, China, Texas, and Texas.
Musk stated that Tesla has seen signs of slowing in China and Europe’s economic activity, while the United States is “looking pretty healthy.”
The chief executive said, in his trademark marketing style, that Tesla could surpass Apple and Saudi Aramco to become the world’s most valued company. He also said that the company was looking at buying back some stock.
Tesla’s share price fell more than 40% this year due to concerns about luxury car demand. The stock is also in trouble because investors worry that Musk will need to sell some of the company’s shares to fund the acquisition of Twitter. After Mr. Musk agreed to purchase Twitter for $44billion, he tried to renegotiate the deal but then changed his mind and said that he would continue with the acquisition.
Musk admitted on Wednesday that he paid a lot more than the investors for Twitter, but that he expects to significantly increase its value. He stated that the company’s long-term potential is an order of magnitude higher than its current value.
Musk made comments about the war in Ukraine this month that both investors and Western policymakers were unnerved by. He proposed a peace plan that would reflect Russia’s territorial ambitions.
Despite a global shortage of automotive parts and computer chips, Tesla managed to increase its production of cars. However, it still faces manufacturing challenges. In July, the company’s Berlin assembly plant was temporarily shut down and then caught on fire in September.
Recently, the company stated that it would begin production on a semi-truck powered by batteries starting Dec. 1. The truck was unveiled by Mr. Musk in 2017. He stated that it would be available for production by 2019. He stated that the first trucks would arrive in December and that the company would aim to produce 50,000 vehicles per year for North American markets.
Mr. Musk also stated that Cybertruck pickup, a product that has been repeatedly delayed, will be in production next year.
An earlier version of this article misrepresented Tesla’s third-quarter profit as a record due to an editing error. The company reported a greater profit in the first three months of the year.