Tesla stuns Wall Street with return to profit
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Tesla has recorded its first profit this year, beating Wall Street estimates as it announnced it was ahead of schedule with its new SUV and Shanghai factory.
On Wednesday (EST) the electric car company stunned analysts, who had expected it to record a loss, by reporting a profit of US$143 million (NZ$223m) on revenue of $6.3 billion (NZ$9.8b)
Shares rose by more than 15 per cent in after hours trading on the news, which the company said was achieved through “fundamental improvements in our operating efficiency”.
It said that it was ahead of schedule with its newest car, the Model Y SUV, which it now expects to launch mid-2020, and had begun trial production of its cheapest car, the Model 3, in a new factory in Shanghai, also ahead of schedule.
In New Zealand, 359 Model 3s were delivered to customers in September.
On a call with analysts chief executive Elon Musk said the facility had been "essentially underwater" in January.
"I'm not aware of any factory of this magnitude in history being constructed in such a short time. As far as I know this is unprecedented," he said.
Musk claimed Tesla's full self-driving mode could be rolled out to some customers by the end of this year.
"It's going to be tight, but feature-complete full self-driving appears to be on track for an early access release by the end of the year. It's not for sure but it does seem to be on track," he said.
Revenue was lower than in the second quarter, the first drop since 2012, which the company said was because of a growing number of leased vehicles.
Earlier this month it said it had delivered 97,000 cars to customers this quarter, a record figure but short of the 99,000 expected by Wall Street.
In its letter to investors the company said they should expect profitability in future, “with possible temporary exceptions”, and said it was "highly confident" in reaching a target of 360,000 deliveries this year.
Musk previously said the company would return to profitability in the second half of 2019, after losses in the first half of the year.
Tesla was in the black in both the third and fourth quarters of 2018, its first ever back-to-back profits.
Musk also suggested that Tesla could supply other automakers with powertrains and batteries at some point, and also said that the company could consider paid advertising in the future, something it does not currently do.
"We may well do advertising to inform people and ensure they are aware of the product, but not engage in the typical trickery that advertisers use," he said. –telegraph.co.uk