Tesla (TSLA) reported mixed third-quarter results after the bell on Wednesday, but shares jumped in after-hours trading as investors cheered a rise in profits, higher gross margins and news that Tesla’s cheaper electric vehicle is on its way to production is next year.

For the quarter, Tesla reported revenue of $25.18 billion, up from $25.4 billion according to the Bloomberg consensus, higher than the $25.05 billion in the second quarter and also higher than the $23.40 billion US dollars that Tesla reported a year ago. Tesla posted adjusted earnings per share of $0.72 versus expected $0.60 on adjusted net income of $2.5 billion and free cash flow of $2.9 billion.

The closely observed gross margin was 19.8%, well above the expected 16.8%.

Tesla shares rose nearly 8% in after-hours trading.

“We delivered strong results in the third quarter with growth in vehicle deliveries both sequentially and year-over-year, resulting in record volumes in the third quarter,” the company said in its earnings presentation. “Preparations are ongoing for our range of new vehicles – including more affordable models – which we will launch in the first half of 2025.”

Earlier this month, Tesla (TSLA) announced third-quarter deliveries that fell slightly short of expectations, causing the stock to decline.

Tesla said it delivered 462,890 vehicles in the third quarter, up 6.4% from the previous quarter, marking the first quarter of delivery growth this year. The numbers were also higher than the 435,059 electric vehicles the company delivered in the same period last year. However, according to Bloomberg, Wall Street had expected Tesla to be closer to 463,897.

“The updated Model 3 ramp continued successfully in the third quarter, with higher overall production and lower cost of goods sold compared to the previous quarter. “Cybertruck production increased sequentially and achieved a positive gross margin for the first time,” Tesla said in its report.

Tesla said it expects vehicle deliveries to see “slight growth” in 2024.

Ahead of Tesla’s third-quarter earnings release, shares were down about 11% since Tesla unveiled its robotaxi called Cybercab on Oct. 10 at its flashy “We, Robot” event at the Warner Bros. studio lot in Burbank, California.

Many analysts and industry observers believe that the debut and release of a cheaper electric vehicle will push electric vehicle sales into the next round, as even CEO Elon Musk has said before. In their Q2 report, Tesla and Musk said the company remains on track to produce new vehicles, likely including a cheaper electric vehicle, in the first half of next year.

Investors and analysts wanted more details about Tesla’s “We, Robot” event on the Cybercab itself and detailed test plans and questions about the development of Tesla’s sub-$30,000 electric vehicle called the Model 2.

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