TESLA RACES AHEAD
First profit in years
Tesla Motors is back in the black.
Elon Musk’s electric-car company reported its first quarterly profit in more than three years — surprising Wall Street and revving the company’s stock as much as 6 percent in after-hours trading Wednesday.
In addition to reaping $139 million in clean-car credits, Tesla said it scored a $22 million third-quarter profit by slashing capital spending.
Just as important, it remains on track to hit its target of cranking out 50,000 cars in the second half of the year.
In fact, Tesla could turn a consecutive profit in the fourth quarter, Musk said, despite plans to spend more than $1 billion to prepare for production by late 2017 of its lower-priced Model 3.
That plan would bring Tesla’s capital budget for the current year to $1.8 billion — substantially below its earlier forecast of $2.25 billion.
“Our current financial plan does not require any capital raise for the Model 3 at all,” Musk said, responding to recent speculation that cashburning Tesla would be forced to sell additional shares to raise cash.
Musk admitted, however, that “that’s different from saying whether we should raise capital or not to account for uncertainty or have a larger buffer, and sort of derisk the business.”
While the average selling price of Tesla’s Model S Sedan was down slightly in the quarter, that reflected in- creased sales of a new lowerpriced model powered by a 60 kilowatt-hour battery, the company said.
Meanwhile, Tesla has been scrambling to meet demand for the Model S P100D — a new, 100 kw/h version that can go from 0-to-60 in 2.5 seconds when in “Ludicrous Mode,” making it the world’s fastest production car.
“After this call, I’m probably going to be on the 100 kw/h production line,” Musk said. “Demand is high, and we need to satisfy that demand.”
Elsewhere, the hard-charging Paypal co-founder said recent reports that Tesla had been discounting cars to meet sales targets were exaggerated.
“There were a few discounts, but they were few and far between, and that has been absolutely shut down to zero,” Musk said.
Tesla swung to a net profit of 14 cents a share in the quarter from a loss of $229.9 million, or $1.78 a share, a year earlier. Revenue more than doubled to $2.3 billion.