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Blog Tesla Posts Q3 Profit



Tesla posted a surprise third quarter profit on Wednesday.

The company reported revenue of $6.3 billion versus estimates of 6.45 billion with a gross margin of 18.9% versus estimates of 17.7%.

According to the company’s Q3 2019 Update:

Last year, our story was about ramping the Model 3. While total volumes are expected to grow by approximately 50% in 2019, this year our focus has been cost control and preparing for our next phase of growth.Despite reductions in the average selling price (ASP) of Model 3 as global mix stabilizes, our gross margins have strengthened. Additionally, operating expenses are at the lowest level since Model 3 production started. As a result, we returned to GAAP profitability in Q3 while generating positive free cash flow. This was possible by removing substantial cost from our business. We have also dramatically improved the pace of execution and capital efficiency of new production lines. Gigafactory Shanghai was built in 10 months and is ready for production, while it was ~65% less expensive (capex per unit of capacity) to build than our Model 3 production system in the US. Continued volume growth and cost control are an important combination for achieving sustained, industry-leading profitability.

Tesla’s revenue was down year-over year, but the company said the percentage of leased vehicles has tripled and alone has impacted revenue by the majority of the YoY decrease.

“We are positioned to accelerate our growth further through Gigafactory Shanghai, Model Y and also through increasing build rates on our existing production lines,” Tesla said in the update. “These capacity increases will allow for higher total vehicle deliveries and associated revenue. We also expect to gradually release nearly $500M of accumulated deferred revenue tied to Autopilot and Full Self Driving features.”

 
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This should teach people to not bet against Elon Musk. He is a miracle worker, and the reason I have a Tesla and own the stock! Really wish I could go to Mars too, but I'm too old for that. LOL
Over at Yahoo News, there's an article and photo of a blue Model S at the Nurburgring, with a tall rear wing installed, much like the one on late model Dodge Vipers. Some guy called the car a custom race car, not a production car (like the new electric Porsche). I pointed out to the guy, as you did, don't bet against Musk. That he's just experimenting at the moment, and that he's perfectly capable of releasing an S with the new Plaid drive, modified diffusers AND a rear wing like that, should he like the performance. And that makes the "custom race car" a production car.
 
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jboy210

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Over at Yahoo News, there's an article and photo of a blue Model S at the Nurburgring, with a tall rear wing installed, much like the one on late model Dodge Vipers. Some guy called the car a custom race car, not a production car (like the new electric Porsche). I pointed out to the guy, as you did, don't bet against Musk. That he's just experimenting at the moment, and that he's perfectly capable of releasing an S with the new Plaid drive, modified diffusers AND a rear wing like that, should he like the performance. And that makes the "custom race car" a production car.

I actually think this is a likelihood. More Superchargers being add at the Ring, and racing tires we put into the catalog. Who says a P++ version of the S that is minimally street legal and eats a Taycan's lunch around the Ring' is not going to be available, for a big uplift. They used to have street cars that looked a lot like the race models. I had a 1970 Bose 302 Mustang. Other people had Dodge Daytona Superbirds.

As they say "Win on Sunday, sell on Monday". Studies show it still works.

Study: 'Win On Sunday, Sell On Monday' Still Holds True
 
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Don't forget that one of the more important metrics of a vehicle is purchase price. As of now, a sub-$100k Tesla is being compared to a Porsche that costs nearly twice as much in terms of performance. This is always easier whenever you're in 2nd place and you know your target. Porsche chose to focus on the performance aspect while allowing the pricing aspect to cover this in hopes that people would pay a premium for a Porsche that had the #'s of a "Tesla killer". Think of how much performance Tesla can cram into a car at even a 50% higher MSRP than it currently sells. I think that's the testing we're seeing now is a "Taycan killer" for $145k or less. How's that for flipping the scales?
 
I actually think this is a likelihood. More Superchargers being add at the Ring, and racing tires we put into the catalog. Who says a P++ version of the S that is minimally street legal and eats a Taycan's lunch around the Ring' is not going to be available, for a big uplift. They used to have street cars that looked a lot like the race models. I had a 1970 Bose 302 Mustang. Other people had Dodge Daytona Superbirds.

As they say "Win on Sunday, sell on Monday". Studies show it still works.

Study: 'Win On Sunday, Sell On Monday' Still Holds True
Superbirds. I did not know the only reason they were offered for sale was for homologation. Chrysler had to sell a certain number of that model in order to qualify for NASCAR races. First time I saw a Plymouth or Dodge wing car, my immediate thought was: Who the heck would buy that? LOL
 

jboy210

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Dec 2, 2016
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Northern California
Superbirds. I did not know the only reason they were offered for sale was for homologation. Chrysler had to sell a certain number of that model in order to qualify for NASCAR races. First time I saw a Plymouth or Dodge wing car, my immediate thought was: Who the heck would buy that? LOL

NASCAR has always had these funny "production" car rules. They used to have cut-outs of the production car's profile. Your race car had to more or less match so you weren't cheating too much aerodynamically.
 
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