Elon Musk has proven naysayers wrong by steering Tesla into profitability. The California-based company reported a profit for the third quarter of 2018 as its ability to mass-produce and sell the all-important Model 3 greatly improved.
Speaking during a conference call, Musk revealed Tesla ended the third quarter with a net income of $311 million. The news comes after years of not-insignificant losses that bred skepticism around the company’s ability to make money. It lost nearly $620 million during the third quarter of 2017, for example.
Better still, Musk predicted Tesla is now in a position to sustainably make money. He expects the firm will remain in the black during the final quarter of the year.
It’s not a coincidence that news of the profitable quarter came after the company made significant progress in its quest to exit what it called “production hell” and streamline the Model 3‘s production process. Musk explained that his team slashed the amount of time needed to build Tesla’s entry-level model by 30 percent between the second and third quarter of 2018, notably by reducing the amount of configurations available. He didn’t release a specific figure but pointed out it now takes less time to build the Model 3 than to make the Model S and the Model X, which are bigger and more complicated vehicles.
Tesla made 53,239 examples of the Model 3 during the third quarter, according to CNBC. That’s slightly less than its goal of building 5,000 cars a week but workers assembled 5,300 units during the last week of the quarter. The only way to go from this point is up, according to Musk.
“We will focus even further on cost improvements while continuing to increase our production rate,” the company said during a conference call with investors. Musk noted demand for the Model 3 stands at between 500,000 and one million cars annually. The launch of a mid-range variant priced at $46,000 before options and incentives makes the sedan accessible to a broader customer base. The long-promised $35,000 variant of the car is months away from making its debut, Tesla added.
Tesla shares rose by 12 percent immediately after the firm announced its profitable quarter. They closed at $288.50 on Wednesday, October 24, and opened at $317.21 the following morning.
