Tesla Motors has delivered on chief executive Elon Musk’s promise to make money during its latest quarter after fulfilling his pledge to boost production of its first electric car designed for the mass market.
The company earned 311.5 million dollars during the three months ending in September, swinging from a loss of 619 million dollars at the same time last year. It is only the third time Tesla has posted a quarterly profit in its eight-year history as a public company and the first time in two years.
A big jump in Tesla’s output of its mass-market Model 3 car powered the breakthrough. The manufacturing increase and moneymaking quarter are two things Mr Musk promised would happen in early August. Revenue more than doubled from last year to 6.8 billion dollars to easily top analyst estimates, just as the profit did.
Tesla’s stock soared 13% to 326.12 dollars after the numbers came out. In a conference call with analysts late on Wednesday, Mr Musk predicted Tesla would remain profitable from this point on.
“This quarter was an important step toward that,” he said after getting choked up talking about the support Tesla’s customers have shown the company. “I am incredibly excited about what lies ahead.”
The third-quarter performance should help restore some of the credibility he lost after he followed up the bold profit prediction in August with a startling tweet informing the world he had secured financing to pull off a buyout of Tesla.
He later abandoned his plan and the Securities and Exchange Commission filed a lawsuit alleging that he had misled investors because he was never close to lining up the estimated 25 billion to 50 billion dollars it would have taken to pull off the deal.
After initially denying the SEC’s accusations, Mr Musk and Tesla agreed to pay a combined 40 million dollar fine to resolve the case without acknowledging or denying wrongdoing. He must also step down as Tesla’s chairman for at least three years as part of the settlement, although he can remain as CEO of the company that has become synonymous with him.
In Wednesday’s conference call, he brushed aside a question about the attributes Tesla wants in its next chairman, who is supposed to be appointed by mid-November under the SEC settlement. He said he would only accept questions about Tesla’s operations, blocking any potential questions about the buyout proposal that landed him in trouble.
Mr Musk was unusually restrained through most of the call, although he occasional broke into some braggadocio. “I think we may have the most exciting product road map of any company on earth, by far,” he boasted at one point.
For now, Tesla must focus on continuing to make money to stay afloat, with about 10 billion dollars in debt that has been taken on while Mr Musk has pursued his ambition to create a viable car maker that makes vehicles running on something besides petrol or diesel.
About 1.3 billion dollars of that debt comes due by March, intensifying the pressure on him to stop the steady losses.