Tesla’s profitable fourth quarter sets the pace for the EV sector

Recent Tesla news has focused on the electric vehicle manufacturer’s change in model naming conventions and the upcoming Model Y. January is also an earnings statement month for Palo Alto, California-based Tesla, however, and the company released its fourth-quarter 2018 statement this week. As it did in the previous quarter, the EV company reported a profit for the final 2018 period.

The fact that Tesla strung together two consecutive profitable quarters bodes well not only for the car company but also for the full field of electric vehicle manufacturers now and in the near future.

Tesla’s success as a domestic and, with an upcoming factory in China, soon-to-be global automobile manufacturer makes it the flag bearer for all-electric vehicles. Virtually all other major manufacturers have committed to E -production, but that hasn’t stopped them from hedging their bets.

Just yesterday, for example, Volkswagen stated that its diesel cars are recovering sales stalled by the Dieselgate scandal. CNN quoted Volkswagen board member Jürgen Stackmann saying that diesel engines will “remain an important technology for years to come.” This statement comes from a company that last October stated its intention to use the new MEB EV architecture in up to 50 new electric models.

If Tesla were to fail, the effect on the overall electric vehicle industry would be to slow it down as the boards of directors and investors in other companies would likely refocus on short-term profits. As Tesla thrives, however, the pressure remains and even increases for global automotive manufacturers to continue long-tail EV development programs.

Focusing not on dollars and cents, but on factors that directly affect how soon more of us will be driving electric vehicles with or without the Tesla nameplate, here are highlights from Tesla’s 2018 fourth quarter report:

  • The Telsa Model 3 became the best-selling passenger car by revenue in the U.S. in the third and fourth quarters of 2018.
  • The Model 3 was the top-selling premium vehicle in the U.S. for the full year, including SUVs. European luxury cars have led the sales numbers in the U.S. for years, but in 2018 Tesla’s Model 3 took over.
  • Increased Model 3 production and continued gains in efficiency strengthen Tesla’s near-term outlook.
  • Tesla expects to begin making the Model 3 with a complete production line in Shanghai in late 2019.
  • EVs from all manufacturers outsold hybrid electric vehicles (HEVs) in the U.S. in 2018.
  • By the end of 2020 Tesla expects to begin full production, most likely at its Nevada facility, of the Model Y small SUV, which will share 75 percent of the Model 3’s parts. Because SUVs significantly outsell passenger cars in the U.S., Tesla expects Model Y sales will exceed Model 3 numbers.
  • In the fourth quarter Tesla opened 27 new store and service locations, which now total 379 worldwide, and 69 new Supercharger locations, for a total of 1,421 stations around the world. Many of the new Supercharger stations have 20 to 50 charging stalls, reflecting a greater ability to meet growing demand.
  • Tesla is developing V3 Supercharger technology that will significantly speed up charging times. The V3 technology will be a convenience for customers by offering shorter wait times. V3 will also lower costs for Tesla because each station will be able to serve more customers.

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