It's been a turbulent time for Tesla. The automaker has continually struggled to meet production and delivery targets for the Model 3, while CEO Elon Musk has faced a Securities and Exchange Commission lawsuit and was recently forced to step down as chairman. Despite these setbacks and after making major losses in previous years, Musk has delivered on his promise that Tesla will turn a profit this year, vowing that his company will continue doing so every quarter from now on.

In its earnings report released yesterday, Tesla revealed it turned a $311.5 million profit in the third quarter of 2018, with $3 billion in cash, up $731 million from the second quarter. This is significant because Tesla has only made a profit in two other quarters in its 15-year history - the last profitable quarter was in 2016. As a result of this milestone, shares in the company have risen by 10 percent.

"Q3 2018 was a truly historic quarter for Tesla," CEO Elon Musk wrote in a letter to investors. "Model 3 is attracting customers of both premium and non-premium brands, making it a truly mainstream product." Musk also said Tesla is on track to turn a profit in the fourth quarter.

Seemingly, Tesla's efforts to ramp up Model 3 production has paid off. In the third quarter of 2018, Tesla delivered 83,500 electric vehicles, more than double from the previous period. Out of those, 56,065 were Model 3 sedans, up from 18,440 in the previous quarter. Tesla is also now ready to cash in on demand for the Model 3 in Europe and China and expects to take orders "before the end of this year."

Other factors that helped Tesla turn its biggest ever quarterly profit include reducing the cost of raw materials and cutting the number of labor hours required to make each Model 3. As a result, Tesla says it now takes less time to produce a Model 3 than a Model S or X.

Tesla also says it's still aiming to launch the long-awaited $35,000, 220-mile range Model 3 in early 2019, which seems more feasible now that the company is making a profit. Tesla will need to prove that this quarter isn't a one-off and that it can sustain a profit in the future, however.

In the meantime, last week Tesla introduced a new mid-range battery option for the Model 3 to attract more buyers. It's currently the cheapest model, but at $46,000 it's considerably more expensive than the $35,000 model customers have been promised. The price was also increased by $1,000 after just one week, as the model originally went on sale for $45,000.

Curiously, Tesla is advertising the car at $34,200 with a full $7,500 tax credit and "gas savings" factored out. This seems like a dubious way of duping customers into thinking the entry-level $35,000 Model 3 has arrived, especially as the actual price is hidden at the bottom of the website and that tax credit has now been slashed in half.

Nevertheless, Tesla's earnings reports have shocked many analysts who predicted the company was facing imminent bankruptcy. Musk is proving himself the master of optimization, streamlining the production while continuing to increase demand for his cutting-edge EVs.