Tesla reported a profit in the third quarter, ending seven consecutive quarters of losses. For the third time in history, she managed to achieve such an important milestone. Third-quarter earnings reports, released after the market closed on Wednesday, led to an increase in the value of shares by almost 12% to $ 320. Tesla reported a profit of $ 312 million due to ordinary shareholders of the company for the three months to 30 September. Compared to the same period last year, the company suffered a loss of $ 619 million.
Tesla had only two profitable quarters in the company's history, the last of which ended in 2016. The company's turnover this year was driven by sales of model 3, an electric vehicle in which the company and its CEO Ilon Musk made a big bet.
Tesla makes a profit?
In his letter to shareholders, Tesla expressed confidence that the overall market potential of the Model 3 is not just a market for elite sedans. The company said that customers sell their relatively cheap cars to buy model 3, although it still does not have a leasing option, and in the third quarter, the initial price for model 3 was 49,000 dollars.
The company has not yet submitted its model 3 for $ 35,000. The cheapest version of the “third model” is the middle class version with a 450-kilometer estimated range and a starting price of $ 46,000. Tesla reports that “hard work” reduces the cost of the model from 3 to $ 35,000, noting that, since this can be done, affordable cars will enter the market faster.
The cheaper model 3 makes it difficult for Tesla to keep profits at the long-term level. In the fourth quarter, this pressure may not appear, but ultimately it will still appear if Tesla does not reduce costs. And even if successful, she will have to pay bills: the company has more than $ 10 billion in debt.