A big reason Tesla stock jumped 22% after reporting third-quarter earnings can be summed up in one word: growth.
Along with better-than-expected profit margins, Tesla indicated it expects to grow vehicle deliveries in 2024 compared with 2023. That implies about 515,000 deliveries in the fourth quarter, a record and about 25,000 better than Wall Street was projecting, according to FactSet.
It's a big number for the final quarter of the year. One thing Tesla will use to achieve the record is deals for car buyers.
Over the weekend, Tesla extended its 0% financing offer for some qualifying purchases in China. Earlier discounts have helped. Tesla sold about 182,000 vehicles in China in the third quarter, a quarterly record for the company in that country and up about 66% year over year.
Tesla has 0% financing offers in the U.S. too. It sold about 167,000 EVs to Americans in the third quarter, up about 7% year over year.
Overall EV incentives remain high in America. For September, automotive data provider Kelly Blue Book reported that purchase incentives -- which can be low finance rates or price discounts -- amounted to about 12.3% of the average EV transaction price. That's high. Incentives for all cars amounted to about 4.8% of average transaction prices.
Deals for buyers can be an omen of weaker profitability, but Tesla reported a third-quarter operating profit margin of 10.8%, up more than 3 percentage points year over year. Lower costs helped offset price discounting.
Tesla stock was up at 0.2% in premarket trading while S&P 500 and Dow Jones Industrial Average futures were up 0.5% and 0.6% respectively.
Coming into Monday trading, Tesla stock was up 8% year to date. Shares were up about 26% since Tesla reported third-quarter results this past Wednesday.