Tesla Q3 financial report "Strong Return" After, can FSD transformation continue to open up imagination space?

According to the Smart Finance app, Tesla (TSLA.US) released its third-quarter financial report after the U.S. stock market closed on Wednesday, leaving investors with a deep impression of its profit margins. Data shows that the gross profit margin of the car business, excluding "carbon sales" revenue, rose to 17.1%, easily surpassing the market's expected 15.1%; the operating profit margin was 10.8%, an improvement from the previous quarter's 6.3% and higher than last year's 7.6%.

Tesla CEO Elon Musk stated during the earnings call that Tesla will produce more affordable models in the first half of 2025. He expects car production to grow by 20% to 30% by 2025, and anticipates a significant expansion of Cybercab production by 2026. In terms of autonomous driving, Tesla believes that by the second quarter of 2025, the safety of FSD will surpass human driving levels. The ride-hailing service is expected to launch next year in Texas and California.

When asked if Tesla will introduce a $25,000 affordable model, Musk indicated that Tesla's future lies in autonomous driving. This implies that the Model 2 will not be like a regular car and may not have a steering wheel.

CFRA analyst Garrett Nelson cautioned investors that after four consecutive quarters of underwhelming earnings and disappointment from Robotaxi Day, expectations for the third-quarter financial report were low. Nelson stated that the key issue is the sustainability of Tesla's third-quarter gross margin. He also believes that the widespread expectation of nearly 80% earnings per share growth from 2024 to 2026 is unrealistic.

Wedbush Securities remains optimistic as usual. Analyst Dan Ives stated that with price cuts now a thing of the past, Tesla has demonstrated its ability to expand profit margins as the company continues its transition to artificial intelligence/FSD in the coming years.

Victor Dergunov, head of the investment team at The Financial Prophet, noted that the most significant takeaway is that Tesla's improvement in profitability exceeded expectations, which was the main focus of the report. Additionally, the substantial earnings per share performance suggests that Tesla's profitability may continue to grow beyond expectations.

After the financial report was released, Tesla's stock price rose by 12.1% in after-hours trading, reaching $239.50