Tesla Inc. released financial results for what it called “a truly historic third quarter,” with $516 million in pre-tax profits largely driven by an unexpectedly robust 20 percent gross margin on the Model 3.
Chief Executive Elon Musk promised that Tesla would be profitable in the third and fourth quarter of 2018 from the company’s mass-market $35,000 Model 3 sedan.
Tesla earnings contradict many negative claims of the scorned short community’s outlook for the electric-car maker.
Tesla Q3 2018 Financial Highlights
Here’s how the company did
- Tesla Inc. posted a strong revenue of $6.8 billion versus an expected $6.33 billion.
- After taxes, the company made $311.5 million in GAAP net income.
- Free cash flow at a positive $881 million.
- Tesla Model 3 gross margin was more than 20 percent in the third quarter.
- Cash on hand rose to $3 billion, up $731 million from the second quarter.
- Tesla’s overall automotive revenue grew 82% from the previous quarter, due to the growth of Model 3 deliveries.
Tesla Q3 2018 Operational Highlights
Tesla Q3 2018 performance provides a roadmap for Elon Musk. It’s also an answer to critics who’ve questioned the chief executive’s notorious tweeting. Despite difficulties in the past year, Tesla has produced a solid performance. The electric car-maker has a better chance of giving an even more historic performance to make a major payment of loans.
The surge of production in the third quarter helped. Tesla made 53,239 Model 3 vehicles during the third quarter, meeting its goal for the production of its mass-market sedan.
The electric car-maker opened four new store and service sites in the quarter, resulting in 351 locations worldwide. It plans to open up dozens of its own body shops in the U.S. over the next few quarters.
The Tesla charging network has over 11,000 Supercharging connectors and over 20,000 charging destination charging connectors globally.
The third quarter profit is incredibly good news for Tesla as it is facing manufacturing woes. The rising challenges in the automotive industry such as fluctuations in steel tariffs, and the decline of a federal tax credit intended to encourage EV sales would only increase difficulty.
A week ago, Tesla unveiled a cheaper Model 3, which is a midrange version of the vehicle exclusively sold up until now. The cheap Tesla Model 3 is still not the $35,000 base model CEO Elon Musk promised us way back in 2016. The cheaper Model 3 holds a promise for Tesla.