Tesla's Q3 Surprise: Profit Margins Brighten Despite Incentives

Tesla reported unexpectedly high profit margins for Q3, even after offering financial incentives to boost demand for its electric vehicles. Shares rose 4.8% as deliveries increased. Despite slashed prices last year causing margin decline, cheaper financing and falling raw material costs are mitigating the impact.

In a surprising twist, Tesla announced higher-than-anticipated profit margins for the third quarter, dispelling concerns over its financial incentives strategy to spur demand for its electric vehicle lineup.

The automaker, based in Austin, Texas, saw a 4.8% increase in its shares during after-hours trading. Tesla's recent financial results revealed a 6% rise in vehicle deliveries compared to the same quarter last year, highlighting a rebound after the earlier slump in the first half of the year.

Despite a price cut last year that slashed profit margins, the company pivoted to offering affordable financing and discounts this spring. This move, along with lowering raw material costs, is expected to help stabilize margins. Additionally, Tesla's introduction of new autonomous vehicles, including the Cybercab robotaxi, promises exciting growth in its tech endeavors.

(With inputs from agencies.)