Tesla's chaotic third quarter saw profits climb but revenue falter

The company built 365,923 vehicles between June and September, and delivered 343,830 of them.

Carlo Allegri / reuters

Tesla faced increasing transportation costs paired with "raw material cost inflation," continued component shortages and a strengthening dollar in Q3, all of which which ate into its quarterly revenue ($21.45 billion vs $21.96 billion expected). Yet the EV automaker still managed to set production records at each of its factories. According to the company's quarterly production report published at the start of the month, Tesla built 365,923 vehicles in Q3 and delivered just 343,830.

Revenue from automotive sales reached $18.69 billion this past quarter, a 55 percent increase year-over-year, which has helped the company recover some momentum lost during its slower second quarter. Values in Tesla stock have dropped more than 17 percent since that report's publication, CNBC reports, and have fallen more than 5 percent since the close of market Wednesday when Tesla's earnings were released. Q3 also saw Andrej Karpathy, Tesla's Director of AI, leave the company after a half decade heading up the company's ADAS development.

Despite these most recent losses, Tesla did see its profits double over the past year to $3.29 billion and "it looks like we'll have an epic end of year," CEO Elon Musk said during the investor call. "We have excellent demand for Q4 and we expect to sell every car that we make for that."

Musk also provided an update on availability of the Full Self-Driving beta wide release. "We're expecting to release the full self-driving software to anyone who orders the package by the end of this year," Musk said during the call. "It won't have [NHTSA] regulatory approval at that time, but with the car will be able to take you from your home to your work, your friend's house, the grocery store, without you touching wheel."

"We're not saying that's quite ready to have no one behind the wheel," he clarified. "It's just that you will almost never have to touch the vehicle controls."

Tesla has targeted a 50 percent annual vehicle sales growth over the next few years. In 2021, Tesla delivered some 936,000 vehicles and has delivered delivered 908,573 vehicle to date in 2022. So in order to meet the 50 percent growth goal, the company will need to sell roughly 1.4 million vehicles in total, this year, as Autoblog notes, with 490,000 of those coming in Q4. Tesla also recommitted to beginning deliveries of its Semi starting in December. "The factories are running at full speed and we're delivering every car we make and keeping operating margins strong," Musk declared.

These developments come as Musk's potential $44 billion purchase of Twitter winds its way through the courts and which could demand the Tesla CEO sell more of his shares in the car company to fully finance the deal. "I'm excited about the Twitter situation because obviously I know that product incredibly well and it’s an asset that has sort of languished for a long time and has incredible potential," Musk said.