Despite lower-than-expected third-quarter sales and persistent profit margin difficulties, Tesla is sticking to its full-year production estimate. Tesla stock (NASDAQ:TSLA) fell 3.73% in after-hours trading after the results report, indicating a Thursday opening bell price of $213.74 per.
Market Analysis of Tesla Stock
Tesla (TSLA) reported better-than-expected third-quarter results on Wednesday. Still, total sales fell short of Wall Street projections. At the same time, profit margins remained unchanged from the previous period, indicating a tough background for the renewable energy vehicle as the year winds down.
Tesla (NASDAQ:TSLA) reported adjusted profits of $1.05 per share for the three months ended September, up over 70% from the same time last year and 5 cents ahead of the Street expectation of $1.00 per share. Group sales increased 56% year on year to $21.45 billion, falling short of analysts’ expectations of $21.96 billion but still far ahead of the $16.94 billion recorded in the second quarter.
Tesla reported gross automotive margins of 27.9%, a 600 basis point decrease from last year and a flat result from the second quarter due to a jump in input prices and expenditures associated with the ramp-up of new plants in Austin and Berlin.
“We continue to concentrate on growing car production as soon as possible by raising our weekly build rate in Fremont and Shanghai and gradually working through the production ramps in Berlin and Texas,” Tesla said in its results presentation. “Logistics unpredictability and supply chain bottlenecks continue to be urgent issues, even as they improve.”
“We continue to think that battery supply chain limitations will be the primary impediment to EV market development in the medium and long term,” Tesla said. “Despite these obstacles, we aim to deliver every car manufactured while maintaining high operating profits.”
What Next for Tesla Stock
Tesla also repeated its summer forecast that deliveries would increase by 50% from 2021 levels, welcome news for Tesla stock (NASDAQ:TSLA) investors. This implies a full-year goal of 1.4 million cars, which Tesla CFO Zachary Kirkhorn described as “more challenging but still feasible with great execution.”
Hot Chinese manufacturing statistics helped third-quarter deliveries achieve 343,830 vehicles for the three months ending in September, a 42% year-on-year gain and the greatest total ever recorded for the Texas-based manufacturer but slightly below analysts’ expectations.
However, demand is expected to fall in the final months of the year as China, the world’s largest EV market, continues to be suffocated by Beijing’s ‘zero COvid’ policies and countries in Europe and North America cut back on big-ticket spending amid looming recession fears and the ongoing surge in energy prices.
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Author Okoro Chinedu 
