Tesla's (TSLA) Q3 2024 earnings report highlights an 8% year-over-year increase in total revenues, reaching $25.18 billion compared to $23.35 billion in Q3 2023. This growth was driven by a combination of higher automotive sales, increased energy generation and storage revenues, and a notable rise in services and other revenues.

Automotive revenues, Tesla's core business, grew modestly by 2% year-over-year to $20.02 billion in Q3 2024, up from $19.63 billion in Q3 2023. This increase was supported by a 33% rise in automotive regulatory credits, which contributed $739 million, offsetting a slight decline in automotive leasing revenues. However, for the nine months ended September 30, 2024, total automotive revenues declined by 6% year-over-year, reflecting challenges in sustaining growth over a longer period.

Energy generation and storage revenues surged by 52% year-over-year to $2.38 billion in Q3 2024, driven by increased deployments of Megapack and Powerwall products. This segment's gross margin also improved significantly, rising from 24.4% in Q3 2023 to 30.5% in Q3 2024, reflecting cost reductions and benefits from IRA manufacturing credits.

Services and other revenues grew by 29% year-over-year to $2.79 billion in Q3 2024, reflecting strong performance in Tesla's ancillary businesses. This segment's growth contributed to the overall revenue increase and highlights Tesla's diversification beyond automotive sales.

Tesla's gross profit increased to $4.997 billion in Q3 2024, up from $4.178 billion in Q3 2023, representing a gross margin of approximately 19.8%. This improvement was driven by higher revenues and cost efficiencies in energy storage and services segments, although automotive gross margins faced pressure due to pricing adjustments and cost dynamics.

Operating expenses decreased slightly to $2.28 billion in Q3 2024 from $2.41 billion in Q3 2023, reflecting Tesla's focus on cost control. Research and development expenses were $1.04 billion, while selling, general, and administrative expenses were $1.19 billion. Restructuring costs of $55 million were also recorded during the quarter.

Net income attributable to common stockholders rose to $2.17 billion in Q3 2024, up from $1.85 billion in Q3 2023, translating to a diluted earnings per share (EPS) of $0.62 compared to $0.53 in the prior year. This improvement reflects Tesla's ability to grow profitability despite challenges in certain segments.

Tesla's energy generation and storage segment demonstrated significant cost efficiency improvements, with gross margins increasing from 18.0% to 26.6% for the nine months ended September 30, 2024. This was primarily due to cost reductions, higher-margin product mix, and IRA manufacturing credits.

Tesla's effective tax rate increased significantly to 22% in Q3 2024 from 8% in Q3 2023, primarily due to the release of valuation allowances on U.S. deferred tax assets in late 2023 and changes in the mix of jurisdictional earnings. This led to a higher provision for income taxes, which rose by $434 million year-over-year.

Tesla's liquidity position remains strong, with $18.11 billion in cash and cash equivalents as of September 30, 2024, along with $15.54 billion in short-term investments. The company also has $5 billion in unused committed credit facilities, providing ample financial flexibility to support ongoing operations and growth initiatives.