TSLA – Daily Chart
The price of TSLA rose sharply on Thursday after the post-market earnings release a day before. The resistance at $265 has been surpassed, and another target at the July 2023 high is around $300.
Tesla’s earnings provided positive commentary for short-and-long-term during the Q3 earnings call, with 2024 deliveries set to rise on a yearly basis. That would require a strong quarter in Q4 as the first nine months have lagged the prior year. An important takeaway was that Elon Musk said that Tesla’s deliveries could grow as much as 30% next year, which is twice what Wall Street had predicted.
Revenues of Tesla’s Energy business also rose sharply by more than 50% year-on-year and now contribute 10% of total revenue. Tesla’s $739 million regulatory credit income during Q3 was its second-highest ever.
These revenues go largely to gross profits and could remain strong as other automakers scale back their EV growth plans, and they would need to buy these credits from companies like Tesla.
Management said the company is on track to deliver a low-cost model next year, with Cybercab mass production expected in 2026. Musk also said the company is aiming to sell at least 2 million Cybercabs annually.
Musk was also still positive on the delayed roll-out of full self-driving, saying, “Our internal estimate is Q2 of next year to be safer than human and then to continue with rapid improvements thereafter.” The new target is “next year,” and he added that “there’s no need to wait for robotaxi or Cybercab to experience full autonomy.”
Tesla is also looking to start a ride-hailing service in Texas and California in 2025, which had a negative effect on Uber shares.
Analyst Gene Munster said Tesla’s earnings had something for both short-term and long-term investors. He sees the strong Q3 profitability and guidance on Q4 and 2025 deliveries as benefits in the short term.
Munster added: “The long-term investors got the golden carrot.” He thinks Musk’s comments on Cybercab deliveries, which could rise to 4 million units annually, as a key positive for long-term investors.
A key issue now could be the US election, as Musk has supported Donald Trump and would likely see that return with beneficial trading conditions. Musk has publicly stated that he would be targeted by a Kamala Harris administration due to his outspoken views and his purchase of the Twitter app.