Elon Musk’s Tesla said on Wednesday it expects to achieve slight growth in vehicle deliveries this year and reported a higher-than-expected profit margin for the third quarter, sending shares up 5% after hours.

“We delivered strong results in Q3 with growth in vehicle deliveries both sequentially and year-on-year, resulting in record third-quarter volumes,” Tesla said in a statement.

“We also recognized our second-highest quarter of regulatory credit revenues.”

Third-quarter profit climbed 17% to $2.2 billion.

It also said that the cost of goods sold – or raw material costs – per vehicle fell to its lowest level ever at around $35,100.

Tesla said earlier this month that its September-quarter deliveries grew by more than 6% on a year-over-year basis, marking the first quarter of growth after a decline in the January-June period.

The company slashed prices last year leading to a sharp decline in profit margins.

This spring, it shifted its strategy to offering cheaper financing options and discounts that analysts have said could slow its margin bleed over the coming quarters.

Prices of raw materials used to make EV batteries have been falling and Tesla has said its costs will decline as a result this year, with the effect diminishing over time.

Earlier this month, Tesla unveiled its robotaxi product, dubbed Cybercab, and a 20-seater self-driving van as it pushes to accelerate development of its autonomous technologies including the Optimus humanoid robot.

Revenue for the July-September quarter was $25.18 billion, compared with estimates of $25.37 billion, according to data compiled by LSEG.

It reported sales of $23.35 billion in the corresponding quarter of 2023.

Adjusted profit was 72 cents per share in the third quarter, beating an average estimate of 58 cents.

The company’s profit margin of 19.8% in the July-September period was higher than estimates of 17.3%, according to 21 analysts polled by LSEG.

That compared with 18% in the second quarter.