Tesla shares slump after it misses revenue estimates

World's most valuable car maker reports higher profits and increased deliveries but misses estimates on overall revenue

Brand new Teslas at the factory in Fremont, California. AFP

Tesla missed Wall Street estimates for third-quarter revenue on Wednesday as the electric car maker led by billionaire Elon Musk delivered fewer vehicles than expected.

Tesla shares slumped 6.26 per cent in after-hours trading to $208.16.

Mr Musk was expected in a conference call to answer analysts' questions about whether Tesla, the world's most valuable car maker, will stick to its target of boosting deliveries by 50 per cent this year.

Some have questioned whether demand is softening.

Tesla achieved record quarterly deliveries largely thanks to its increase in China.

But the EV giant has had its shares tumble about 50 per cent from record highs last November, as investors were unnerved by a cooling global economy and Mr Musk's bid to buy social media company Twitter.

Tesla's revenue for the third quarter was $21.45 billion, short of analysts' estimates of $21.96bn, according to IBES data from Refinitiv.

This month, Tesla said it delivered 35 per cent more vehicles in the July-September period than in the previous quarter, but the number fell short of vehicle production and analysts' estimates.

Tesla chief executive Elon Musk speaks during the opening day of the Tesla Gigafactory in Gruenheide, Germany. EPA

Musk speaks next to German Chancellor Olaf Scholz and the prime minister of Brandenburg state, Dietmar Woidke, during the opening ceremony. AFP

The Tesla chief, right, was cheered as he oversaw the handover of the car maker's first German-made cars at the Gruenheide plant. EPA

Musk described the opening as "another step in the direction of a sustainable future". EPA

Tesla is likely to launch a test version of its new "full self-driving" software in Europe, possibly next year, the chief executive said. EPA

Musk dances as he hands over the first Teslas from the new factory. Getty Images

Musk said battery production will be a "challenge" next year and a "limiting factor" in the coming years. Reuters

Tesla cars are parked at the site of the new Tesla Gigafactory in Gruenheide, Germany. Reuters

Tesla was handing over the first Model Y cars made at its €5 billion Gruenheide plant to clients on March 22, the company said. Getty Images

The new Tesla Gigafactory is the company's first European production centre. Getty Images

Newly completed Tesla Model Y electric cars parked at the site near Gruenheide. Getty Images

The new factory is the largest investment in a German car factory in recent history. Getty Images

A road sign reading 'water protection area' next to the Tesla logo at the site of the Tesla factory. EPA

A road sign reading 'Tesla Street' at the new plant. EPA

A building under construction at the Tesla factory. EPA

At full capacity, the factory will produce 500,000 cars annually. EPA

Tesla plans to hire 12,000 workers at the plant. Bloomberg

Tesla said the delivery volumes it is reaching in the last weeks of each quarter are making transport capacity “expensive and difficult to secure".

Tesla is reacting by moving to a smoother delivery pace, “leading to more vehicles in transit at the end of the quarter", the car maker said in its third-quarter earnings report.

“We expect that smoothing our outbound logistics throughout the quarter will improve cost per vehicle."

Some analysts said Tesla would have a hard time maintaining premium prices and margins, especially as the global economy is cooling and it is increasing production of new factories.

The company's third-quarter gross margin was 27.9 per cent, down from 30.5 per cent last year.

Reuters and Bloomberg News contributed reporting