Tesla's stock price increases by 19%, reaching its best day in over three years, following Elon Musk's prediction of growth by 2025.

• On Thursday morning, Tesla's stock increased by approximately 19%, setting it up for its best day in over three years after a better-than-anticipated earnings report.
• In the third quarter, the company's profit margins were increased by $739 million due to automotive regulatory credit revenue.
• Elon Musk, CEO of Tesla, predicted that vehicle growth will be between 20% and 30% next year, which is higher than the 15% forecasted by analysts surveyed by FactSet.

The stock's price increased by approximately 19% on Thursday morning, setting it up for its best day in over three years after the company released better-than-anticipated earnings.

The company reported revenue of $25.18 billion on Wednesday, which was slightly below analysts' expectations of $25.37 billion but up 8% from the previous year. Tesla reported adjusted earnings per share of 72 cents, surpassing the average analyst estimate of 58 cents.

JPMorgan analysts predict that Tesla shares will experience a strong positive reaction on Thursday due to the surprising earnings beat, as investors have become accustomed to missing earnings from the company.

JPMorgan analysts pointed out that Tesla's profit margins in the third quarter were driven by $739 million in revenue from automotive regulatory credit, which they noted as a "potentially unsustainable driver" of cash flow performance for the future.

Tesla, which only produces electric vehicles, has an excess of regulatory credits that it can sell to other companies.

During a recent earnings call, Tesla CEO Elon Musk stated that he believes vehicle growth will be between 20% and 30% next year, due to the availability of lower cost vehicles and the emergence of autonomy. Analysts surveyed by FactSet had predicted delivery growth of approximately 15% for 2025.

Morgan Stanley analysts who suggest purchasing the stock, consider Musk's 2025 vehicle delivery growth projection as uncertain. They predict a 14% growth rate.

The affordability of the next generation model depends on the company's ability to introduce cheaper models, offer financing, and improve features, according to Morgan Stanley analysts in a note on Thursday.

On Thursday, Tesla's stock gained enough to erase its yearly loss, leaving it up almost 2%. However, it still lags behind the 22% increase of the Nasdaq.

— CNBC's Lora Kolodny contributed to this report.

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