Why the Tesla share price leapt 22% last night

Happy woman on her phone while her electric vehicle charges.

The Tesla Inc (NASDAQ: TSLA) share price looked like it was riding on a SpaceX rocket last night.

Shares in Elon Musk's EV and tech company closed up a blistering 21.9%, trading for $260.48. This marks the best single-day performance in more than 11 years.

This sees Tesla stock up 20% over a year, and it helped deliver a 0.8% gain for the Nasdaq Composite Index (NASDAQ: .IXIC).

Here's what sent the US tech stock to the moon.

What sent the Tesla share price rocketing?

Investors sent the Tesla share price soaring following the release of the company's third-quarter update, which revealed growth across almost all core metrics.

The company smashed consensus expectations, reporting adjusted earnings of 72 US cents per share.

Total revenue of US$25,18 billion was up 8% year on year. And adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$4.67 billion was up 24% from the prior corresponding period.

Tesla reported an operating profit margin of 10.8%, a 3.2% improvement year on year.

Free cash flow was up 223% from the prior corresponding quarter to US$2.74 billion. And the company held cash, cash equivalents and investments of US$33.65 billion, up 29%.

Results were boosted with Tesla's Cybertruck turning a profit for the first time. The company also reported strong growth in its battery-focused energy business.

According to Tesla:

We delivered strong results in Q3 with growth in vehicle deliveries both sequentially and year-on-year, resulting in record third-quarter volumes. We also recognized our second highest quarter of regulatory credit revenues as other OEMs are still behind on meeting emissions requirements

The company reported US$739 million in revenue over the quarter from the sale of regulatory credits to vehicle manufacturers.

Perhaps the biggest tailwind sending the Tesla share price higher overnight came from Elon Musk himself.

The world's richest man has caused some angst amongst investors in recent months with his focus on robotaxis and lifelike robots, areas with high ongoing investment requirements and potentially lengthy payoff periods.

Resetting that focus in a webcast yesterday, Musk indicated that unspecified lower cost Tesla models are set to deliver 20% to 30% growth for the company next year.

Commenting on the results and Musk's change of focus, Gene Munster, managing partner of Deepwater Asset Management, said (quoted by Bloomberg), "Investors who wanted something today got better-than-expected profit and guidance for growth in deliveries. The long-term investors got the golden carrot."

Garrett Nelson, an analyst with CFRA Research, noted that Tesla's share price likely got an extra large boost due to the generally low expectations prior to the announcement of the results.

"Expectations were low heading into the release after four consecutive bottom-line misses and a Robotaxi Day that left investors with more questions than answers," he said.

The post Why the Tesla share price leapt 22% last night appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.