Tesla reported a profit in the third quarter after seven consecutive quarters of losses. Due in part to the popularity of the Model 3 sedan, Tesla said on Wednesday that it generated $6.8 billion in revenue and ended with $311 million in profit – the most the company has ever earned in a quarter.
“Q3 2018 was a truly historic quarter for Tesla,” CEO Elon Musk and CFO Deepak Ahuja wrote in a letter to investors. “Model 3 is attracting customers of both premium and non-premium brands, making it a truly mainstream product.”
Tesla has only had two profitable quarters in its history, with the last one reported in 2016. It is working on introducing a $35,000 Model 3, its initial target price. Currently, the cheapest version of the Model 3 is a mid-range vehicle with a 260-mile EPA estimated range and a starting price of $46,000. Just one week ago, the price was $45,000 for that car but has since been adjusted upwards. Tesla says that thanks to the Model 3 cost reduction, it is expecting to bring down the price and bring more affordable options to the market.
However, by producing a cheaper Model 3, it will make it more difficult for Tesla to sustain profits over the long term. Currently, Tesla reported $3.5 billion in accounts payable, but it has more than $10 billion in debt, with $1 billion of that due within the next six months.
Due to future projects, like the Model Y crossover, Tesla Semi, and factories in Europe and China, many financial analysts expect Tesla to raise new money soon.
The automaker said Wednesday that it delivered 56,065 Model 3 sedans, up from 18,440 in the previous quarter.
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