Despite reporting record quarterly revenue, Tesla’s profitability have declined as a result of US consumers scrambling to take advantage of a significant tax credit on electric car purchases before it expired last month.
According to the company, revenue for the three months ending in September reached a record $28 billion (£21 billion), up 12% over the same period the previous year. However, additional expenses related to research and tariffs contributed to a 37% decline in the company’s profits during the same time period.
The findings are presented ahead of a November shareholder vote on a potential $1 trillion pay package for CEO Elon Musk. Following the release of the news, extended trading saw a 3.8% decline in Tesla shares.
Investor confidence that Musk can fulfil his vision of making Tesla a global leader in robotics and artificial intelligence (AI) has propelled the company’s stock market valuation to approximately $1.4 trillion in recent months. Nevertheless, while those new items are being created, car sales continue to be its primary source of revenue.
As American consumers scrambled to obtain federal tax credits of up to $7,500 before they expired at the end of September, Tesla reversed a trend of dropping quarterly sales. However, competitors such as Ford and Hyundai reported even more robust rise in US sales over the same time frame.
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