Shares of Tesla (NASDAQ: TSLA) were on the move this week after the leading electric vehicle (EV) maker posted strong profit growth in its third-quarter earnings report, and gave a bullish forecast for vehicle production in 2025.

That news helped reassure investors that the company still has plenty of growth left. As a result, the stock was up 15.1% for the week as of 11:55 a.m. ET on Thursday, according to data from S&P Global Market Intelligence.

Tesla bounces back

During a week when Treasury yields were rising, which CEO Elon Musk has said is a headwind for his company, Tesla wowed investors with its third-quarter numbers.

Automotive revenue remained sluggish, up 2% to $20.2 billion, while stronger energy generation and services revenue helped drive overall revenue up 8% to $25.18 billion, but that was still short of the consensus at $25.37 billion.

However, the bottom line was where Tesla shined. Its gross margin expanded from 17.9% to 19.8%, and operating income jumped 54% to $2.7 billion. The company faced a higher tax bill in the quarter so adjusted earnings per share only rose from $0.66 to $0.72, which beat estimates at $0.58.

Tesla reversed a long profit slide with the results as vehicle prices seem to have stabilized, it's benefiting from layoffs in the second quarter, and it said it achieved its lowest cost of goods sold ever per vehicle at $35,100. Musk also said that the Cybertruck recorded a quarterly gross profit for the first time.

Tesla sees a return to growth

While the company still expects vehicle production to be flat this year, Musk said he was targeting 20% to 30% growth in 2025, which pleased investors, and he expects the Cybercab to begin production next year, hitting the road in Texas and possibly California.

The success of that vehicle will be key in unlocking the next leg of growth for the stock. For now, investors are rightly pleased to see a return to profit growth and production growth next year.

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