Could this be the turnaround Tesla needs?
Despite one of the Model S test cars crashing at the Nurburgring this week, the mood at Tesla is buoyant and with good reason. The California based electric vehicle company posted a quarterly profit on Wednesday, surprising just about everyone. There was even more good news for the company when shares of the company shot up 14% to $291.39 in extended trading following confirmation from Tesla that it's producing vehicles on a trial basis at the Gigafactory in Shanghai, China.
Tesla now says it is "highly confident" in exceeding its target of delivering more than 360,000 cars this year. Opening the Shanghai factory will be key to meeting CEO Elon Musk's promises. "We have cleared initial milestones toward our manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai," the company said in a statement.
In the third quarter, Tesla had 79,470 Model 3 cars delivered. Tesla also found its finished vehicle inventory levels reached just 17 days of sales, four times lower than the industry average.
Overall, Tesla posted a profit of $1.86 per share, excluding items, when industry analysts were expecting a loss of 42 cents per share. There's still work to do as Tesla needs to deliver 104,800 vehicles in the final quarter of the year to satisfy its full-year forecast and reported revenue dropped 8% to $6.30 billion.
There's every reason to be optimistic for Tesla as the year starts to draw to a close, though. The new factory in China is looking good, predictions of the Model 3 burning out in its current markets haven't come true. Tesla is also saying that the production of the Model Y is ahead of schedule and expected to arrive by the summer of 2020.