Tesla shares leap 22% after Elon Musk predicts sales rebound

EV maker adds more than $150bn in market value after billionaire says sales may increase as much as 30% next year

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Tesla’s shares notched their biggest one-day gain since 2013 after the world’s largest electric vehicle maker reported higher than expected quarterly profit while forecasting “slight growth” in deliveries this year and a big jump in 2025.

The performance marks a turnaround for Tesla, which has endured a few disappointing quarters as concern spread about slowing global demand for electric vehicles. It has also been caught up in the divisive political activism of its chief executive, Elon Musk, and a court battle to restore his $56bn package of share options.

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Musk on Wednesday afternoon predicted vehicle sales could increase 20 per cent to 30 per cent next year after cost cuts reduce the prices of existing cars which in turn would spur demand.

He also cited improvements to the self-driving technology and new products, including its autonomous “Cybercab” unveiled earlier this month. Musk also said lower interest rates were reducing monthly financing payments and that was having a meaningful impact on demand.

Tesla’s shares rose 21.9 per cent on Thursday, adding more than $150bn to its market value. That may provide some relief to investors, given shares are half their November 2021 peak, though the group is still the most valuable global carmaker.

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Adjusted net income for the third quarter rose 8 per cent from a year ago to $2.5bn, exceeding expectations of $2.1bn, according to a filing from the Texas-based company. Revenue rose 8 per cent to $25.2bn, slightly undershooting the average $25.4bn estimate by analysts.

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Profit was driven by a 2 per cent increase in revenue from vehicle sales — which contributes four-fifths of group income — alongside a 52 per cent jump at its energy generation and storage business and a 29 per cent increase in its services arm, which includes its supercharger network.

Operating expenses fell 6 per cent to $2.3bn after it cut a tenth of its workforce, about 14,000 jobs, earlier this year.

“Despite ongoing macroeconomic conditions, we expect to achieve slight growth in vehicle deliveries in 2024,” Tesla said. “Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025.”

However, Musk said Tesla was not developing a much-anticipated affordable $25,000 “Model 2”.