Tesla achieved profitability for Q3 2018

Tesla approves Model Y for production

During a call with investors, Musk said that the company has made significant progress with the Model Y. The news comes as Tesla gets ready to report the first profitable quarter in two years.

Musk said: "Around mid 2019".

The increase lifted revenue to $6.8bn in the quarter, more than double a year ago.

Pierre Ferragu, head of technology infrastructure research at New Street Research, said, "Tesla will become one of the major premium vehicle manufacturers, like Audi and Jaguar ... within the next seven years", but its success will be from a purely go-to-market perspective, as Tesla has lower costs for marketing and distribution than other automakers.

The company earned $311.5 million during the three months ending in September, swinging from a loss of $619 million at the same time past year.

"Q3 2018 was a truly historic quarter for Tesla", Musk said.

Raises forecast for fourth-quarter GAAP operating margin to 5 percent from 1.6 percent previously, driven by the higher third-quarter base effect and 64,000 units of Model 3 in fourth quarter, or about 5,300/week.

Hargreaves Lansdown analyst Nicholas Hyett said: "Production numbers earlier this month meant we already knew Tesla could churn out the cars, the question was whether it could it do it profitably, and even more importantly, could Musk wean the company off a constant flow of cash from investors?"

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Free cash flow is a measure of how Tesla's "cash in the bank" is changing quarter by quarter. During the same call, Musk stated the $35,000 Model 3 might be available in about six months.

"They are demonstrating they are willing to spend more money for a Tesla".

Tesla executives expect to begin delivering Model 3 cars in Europe in the first quarter of next year, and in China by the second quarter. Musk said the decision was "obvious", saying that the company will maintain a fleet of autonomous vehicles capable of providing rides. "And so Tesla had a good day, and I think Tesla has a lot of upside". In the presentation, Musk mentioned that Tesla would definitely be offering the service in future, which will likely be competing with Lyft and Uber.

The comments suggest Tesla may be ahead of schedule, but Musk has cautioned that production will still have to wait until 2020.

Musk told analysts that Tesla was not starving development of new vehicles to feed profitability. Citing a government filing, Reuters reported on Wednesday that Tesla would make the Model Y at its upcoming factory in Shanghai.

Production is to initially take place in California, but Tesla is "moving rapidly" to get production going in China and wants to have that going next year, he said.

Tesla shares boosted 12 percent after the exciting earnings report.

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