Tesla realizes a surprising profit thanks to a higher production of model 3

Musk had promised that a sustained increase in production of the new Model 3 compact car would allow the company to become profitable in the third and fourth quarters, as well as positive cash flow. Model 3, priced at $ 46,000, is Musk's bet that he could turn the company from a niche luxury brand into a legitimate competitor against the world's biggest automakers.

His vision of the future of transportation sent up shares to give Tesla incomparable market value.

General Motors
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, but his difficulties in pulling out Model 3 in the past year and his behavior have raised questions about the company's ability to perform.

The Builder of the Model S sedan and the Model X sport utility vehicle, which typically sells for about $ 100,000, has not made any profit since the third quarter of 2016, when it realized $ 22 million.

Tesla's free cash flow reached $ 881 million, compared to a negative $ 740 million in the second quarter. Analysts expected positive free cash flow of $ 191 million in the third quarter. Tesla's cash on hand improved to $ 3 billion at the end of the quarter, compared to $ 2.2 billion at the end of June.

million. Musk avoided predicting that Tesla would need to raise additional funds to finance its operations and growth.

Revenues were $ 6.82 billion in the quarter, up from $ 2.98 billion a year ago and exceeding the average estimate of $ 6.1 billion. dollars expressed by badysts.

Tesla shares rose more than 13% to $ 327 after trading hours. Before profits, the stock had dropped 14% over the past year.

The company was running at an exhausting pace to produce a record 80,142 vehicles in the third quarter, but Mr. Musk made several self-induced blunders that added to the drama of the period.

In particular, Mr. Musk stated in

Twitter

on August 7, he received funds to finance Tesla privately. The surprise announcement triggered a surge in equities, which then fell as it became clear that an agreement was not reached.

The Securities and Exchange Commission filed a lawsuit alleging that Mr. Musk was misleading investors and seeking to ban him from being a director or officer of a publicly traded company. He then reached an agreement allowing him to remain as CEO of Tesla, but he must leave the presidency in the coming weeks. Tesla must also name two new directors.

The latest episodes mark a year of struggle for Tesla, which has missed several deadlines it has imposed to increase the production of model 3. The vehicle was badembled in July 2017 in the factory of the company to Fremont, California.

Tesla finally achieved the long-promised goal of making 5,000 3 models in a week during the last seven days of June. The company was looking to build on that momentum, but in the end it had an average of 4,095 models 3 per week during the period. He said he built more than 5,300 cars in the last week of the third quarter.

Revenue from the sale of pollution tax credits to other automakers reached $ 52 million during the period, after reporting none in the second quarter. The increased activity has increased Tesla's profits in the automotive sector.

Meanwhile, the company's accounts payable reached $ 3.6 billion against $ 3 billion at the end of June.

A strong performance could be a turning point for the opinions on Tesla, announced Tuesday Ben Kallo, an badyst of Robert W. Baird & Co., in a note to investors. "Some think it will take several quarters of execution to turn the narrative, but we think that a strong Q3 and favorable prospects for teleconferencing should be enough to drive up the shares," he said. -he declares.

Writing to Tim Higgins at [email protected]