Tesla with profits? Looking at Tesla's history since its founding in 2003, it's still surprising that its doors are still open, as profits don't seem to want anything to do with Tesla. Until today, it only "came out of the red" in two quarters of its existence...
What makes this announcement an event of high magnitude. Tesla reported profits from 314 million dollars profit (just over 275 million euros) in the release of financial results for the third quarter of 2018 (July, August and September).
Elon Musk had “predicted” it in previous statements, and also promises a positive fourth quarter, which should substantially mitigate the huge losses seen in the first two quarters of the year.
Justified profits
The profits achieved in this last quarter can be justified by the stabilization of the Model 3's production system, after the steep rises in production in the first two quarters, often in a chaotic and mediatic way.The four-wheel drive AWD variant was also introduced, which is already the majority of the Model 3's produced, and despite the additional complexity, Tesla managed to keep the Model 3's production at an average of 4300 units per week, with some peaks above the 5300 units.
With the AWD variants being the most produced, the average purchase price of the Model 3 has risen to $60,000 , at the same time that the brand announced a reduction in the number of hours per car produced, now being lower than those of the Model X and Model S. Model 3 profit margins are above 20% , an amazing value.
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$35,000 Tesla Model 3 on the way
In the release of the results, it was also announced that of the total of 455,000 reservations announced in August 2017, less than 20% were cancelled. Now what remains is to convert the remaining reserves into purchases, to which new variants of the Model 3 already on the way will contribute, as well as the introduction of the model in international markets (outside North America), such as the European market (expected arrival in the middle of the next year).
The first addition to the range was introduced recently as a new option when it comes to the battery pack. In addition to the Long Range option (long haul) that allows 499 km of autonomy, and the Standard Range (access version) with 354 km, we now have the option Mid Range (medium course) which allows 418 km.
The introduction of this new option means, apparently, and relying on Elon Musk's tweets, the end of the Long Range version with two drive wheels, with this battery option only available on the AWD variants.
What about the $35,000 Model 3? It's definitely on its way, with the arrival date (US market) now scheduled for somewhere between February and April 2019.
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