Tesla shares surge 13% after Elon Musk gives strong sales forecast

Shares of Tesla surged more than 13% before the opening bell on Thursday after CEO Elon Musk told investors he expects the company’s electric vehicle sales to rise by between 20% and 30% next year as preparations are underway for the rolling out of more affordable models.Tesla, whose market capitalization at the close of trading on Wednesday reached nearly $670 billion, is poised to add another $80 billion to its value on Thursday thanks to the optimistic forecast, which calls for a “slight growth” in deliveries this year.The company said that it made $2.17 billion in the three-month period spanning from July through September — more than the $1.85 billion in profit it posted in the same period last year.Tesla’s third-quarter profit margin from vehicle sales, excluding regulatory credits, grew to 17% from 14.6% in the prior three-month period, according to Reuters calculations.Wall Street had expected 14.9%, according to 24 analysts polled by Visible Alpha.The EV giant said that the labor and material costs of making vehicles, known as the cost of goods sold per vehicle, dropped to its lowest-ever level, about $35,100.

Adjusted profit of 72 cents per share in the third quarter beat an average estimate of 58 cents.Wall Street was unimpressed by Tesla’s unveiling of its robotaxi earlier this month, but analysts were reassured by Musk during a conference call on Wednesday during which he indicated that the cost of making vehicles dropped.“No EV company is even profitable,” Musk told analysts on Wednesday.“And to the best of my knowledge, there was no EV division of any company, of any existing auto company that is profitable.

So it is notable that Tesla is profitable despite a very challenging automotive environment.”Shares of Tesla’s smaller EV rivals — Rivian and Lucid — were both up between 1% and 2% in pre-market trading on Thursday.Musk said Tesla would roll out driverless vehicles offering paid rides next year, after the company receiv...