Musk: Tesla Succeeding Financially, Advancing Technologically

After posting gains in revenue and income, which boosted the value of the company’s stock in after-hours trades, making Elon Musk even richer, the Tesla CEO is promising big advances in self-driving technology that will help the BEV maker grow by 20% or more in 2025.

“We’re still on track to deliver lower-cost vehicles,” Musk says during a conference call with investors and analysts following the release of Tesla’s third-quarter financial and production report. Something like 20%-30% vehicle sales growth next year is “my best guess, ” he says.

The automaker reports its revenues increased 9% in the third quarter, but much of the additional revenue came from its separate energy or storage-battery business and selling its services. The company’s automotive sales grew only 2%, and a substantial part of Tesla’s 17% increase in profits also came from the services and storage businesses.

Tesla reports total gross margins came in at 19.8%, and Tesla Energy gross margins hit a record 30.5%, lifting margins across the board.

In the past few days, Tesla has announced zero-percent financing for Model 3 and Model Y purchases in the U.S. while inventory discounts are picking up.

Musk, though, is ebullient as he describes the company’s performance. “I have seen year-over-year declines in order volumes in Q3. Tesla at the same time has achieved record deliveries. In fact, I think if you look at EV companies worldwide, to the best of my knowledge no (other) EV companies are even profitable. And…to the best of my knowledge, there was no EV division of any company, of any existing auto company, that is profitable,” he says during the conference call.

The company’s strong performance in the third quarter sets the stage for future growth, Musk says, adding he sees the autonomous Cybercab, unveiled earlier this month, reaching volume production in 2026. “We’re aiming for at least 2 million units a year of Cybercab,” he says.

Plans for new vehicles, including more affordable models, remain on track for the start of production in first-half 2025, says Musk, noting the refreshed Model 3 ramp-up continued successfully in the third quarter with higher total production and lower cost of goods sold quarter-over-quarter.

According to Musk, Cybertruck production increased sequentially and achieved a positive gross margin for the first time. The new Semi-Truck factory should be ready to start building heavy trucks by the end of 2025, the CEO says, adding any company that does not adopt a battery-powered semi-truck “will lose…It will be a mass improvement in (relieving) driver fatigue and driver safety. It is radically better than a diesel truck.”

Even as automakers pull back on their promises around autonomous driving, Musk says his Cybercab will push Tesla into a new, more prosperous era.

Musk adds the take rate for Full Self-Driving (FSD) – people buying or subscribing to the system – has “improved substantially, ” and Tesla realized $326 million of FSD revenue in the third quarter.

Moreover, Tesla continues to make significant improvements in the technology behind FSD, says Musk. “Our internal estimate is (by) Q2 of next year to be safer than human (drivers) and then to continue with rapid improvements thereafter,” he says.

“Especially for something like a Model 3 or Model Y, it looks like a normal car. So, you do not expect a normal car to be able to be intelligent enough to drive itself.

“You do not expect a fairly normal-looking car to have intelligent enough AI to be able to drive itself, but it does. We do want to expose that to more people. And so…every time we have a significant improvement in the software, we will roll out another sort of 30-day trial.

“So, there is no need to wait for a taxi or Cybercab to experience full autonomy. We expect to achieve that next year…with our existing vehicle item,” Musk says.

The CEO says Tesla expects to roll out ride hailing in California, subject to regulatory approval, and in Texas and other unspecified states. “My prediction is Tesla will become the most valuable company in the world by a long shot,” says Musk.

Musk says Tesla is reaching out to quell unrest about the long wait for service among its existing customer base as it opens 70 new locations and doubles the size of existing service networks. “We make cars, and we service cars,” he says.