Tesla reported profit in the third quarter, ending seven consecutive quarters of losses. For the third time in history it has managed to reach such a milestone. Earnings reports for the third quarter released after the market closes on Wednesday, led to a rise in the value of shares by almost 12% to $ 320. Tesla reported a profit of $ 312 million dollars owed to ordinary shareholders of the company for the three months to September 30. Over the same period last year, the company suffered a loss of $ 619 million dollars.
At Tesla only had 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 Model 3 electric car, which the company and its CEO Elon Musk made a big bet.
Tesla goes in profit?
In his letter to shareholders, Tesla expressed confidence that the total market potential Model 3 is more than just the market for luxury sedans. The company said that customers sell their relatively cheap cars to buy a Model 3, although she did not yet have the option of leasing in the third quarter of the initial price of the Model 3 was 49 000.
The company has not presented its Model 3 for $ 35,000. The cheapest version of the “third model” is a version of the middle class with a 450-mile estimated range and a starting price of 46 000$. Tesla reports that “works hard” to reduce the cost of Model 3 up to $ 35,000, noting that because it can be done, the available cars will appear on the market faster.
Cheaper Model 3 will make it difficult for Tesla challenge to maintain the profit level in the long term. In the fourth quarter of this pressure may or may not appear, but in the end it will still appear if Tesla will reduce costs. And even if successful, she will have to pay the bills: the company has more than $ 10 billion of debt.
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