Electric-car maker Tesla Inc on Wednesday reported a “historic” quarterly profit driven by demand for its mass market Model 3 as the company looks beyond its US home base to Europe and China.
Tesla chief executive officer Elon Musk said he expects the company to stay profitable from this point forward, and addressed company debt and snags ramping up production line efficiency.
Musk said he expected the company to make even more Model 3 vehicles in the current quarter and to begin delivering the cars in Europe and China early next year.
Photo: AP
“I am incredibly excited about what lies ahead,” Musk said in an earnings call with analysts.
Tesla said third-quarter net income reached US$311.5 million on revenue that more than doubled year-on-year to US$6.8 billion.
The earnings beat Wall Street expectations that Tesla would take in less money in the quarter and log another loss.
Tesla shares leapt 9.8 percent to US$316.80 in after-market trades after the earnings release.
For the same period a year earlier, the company reported a loss of US$619 million.
“Q3 2018 was a truly historic quarter for Tesla,” Musk said. “Model 3 was the best-selling car in the US in terms of revenue and the fifth best-selling car in terms of volume.”
Tesla’s assembly line produced an average of 4,300 cars weekly in the quarter, nearing a goal set by Musk.
The firm has also improved efficiency, ramping up the gross margin on Model 3 vehicles to more than 20 percent, Musk said.
Model 3 cars start at about US$50,000, despite a Tesla goal of making an electric car priced for the masses.
Musk said his aim is to get the Model 3 price down to US$35,000, with a production cost of less than US$30,000.
“That is our goal, and that is what we are pushing very hard to achieve,” he said.
Musk told analysts that Tesla was not starving development of new vehicles to feed profitability.
Tesla has made significant progress on a Model Y, with a prototype set for production, and is continuing to develop an electric semi truck as well as a new roadster model, Musk said.
Tesla executives expect to begin delivering Model 3 cars in Europe in the first quarter of next year, and in China by the second quarter.
Production is to initially take place in California, but Tesla is “moving rapidly” to get production going in China and wants to have that going next year, he said.
“We will also have a factory in Europe long term, because it is pretty silly to make cars in California and ship them to Europe,” he said.
The Model 3 would be available in Australia and the UK in about the middle of next year, he said yesterday.
In response to a tweet asking when the Model 3 will be available in Australia, Musk wrote: “Around mid 2019,” later tweeting that it would also be available in the UK during the same period.
Additional reporting by Reuters
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