Tesla sales climb but fall short of revenue expectations
Global News
Tesla is expanding fast despite global economic jitters, and investors are closely watching for signs that the cooling economy would hurt demand.
Tesla Inc on Wednesday posted record third-quarter revenue but still missed Wall Street estimates as the electric carmaker led by billionaire Elon Musk delivered fewer vehicles than expected, while spending on new factories and new battery production squeezed margins.
Chief Executive Musk told analysts on a conference call there was excellent demand for the fourth quarter, addressing investor concern that buyers could be discouraged by the weak global economy and high prices for Tesla vehicles. But executives said some delivery issues would persist, with fourth-quarter deliveries tracking under 50 per cent growth while production hit 50 per cent growth.
Shares fell 4.3 per cent in after-market trading.
Tesla is expanding fast despite global economic jitters, and investors are closely watching for signs that the cooling economy would hurt demand.
The company’s third-quarter automotive gross margin was 27.9%, missing analysts’ estimates and down from 30.5% a year earlier.
Tesla’s revenue for the third quarter was $21.45 billion, a record but short of analysts’ estimates of $21.96 billion, according to IBES data from Refinitiv.
The company said it had a negative foreign exchange impact of $250 million on its earnings, as the U.S. dollar strengthened against major currencies.
“Raw material cost inflation impacted our profitability along with ramp inefficiencies” from its new factories in Berlin and Texas, and the production of its new 4680 batteries, according to Tesla’s statement.
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