Tesla finished Q4 with a net profit of $139 million: the second profitable quarter in a row

Company manufacturing electric vehicles has not met expectations of profit, wall street, slightly reducing the value of the stock after hours.Nevertheless, Tesla is already second quarter in a row makes a profit. Tesla stunned investors when in October last year said it earned a net profit of $312 million, which is the first quarter of 2016, when the company lost money.

In the last quarter of 2018, which ended in December, Tesla made a profit of $139 million, or $0,78 per share. For the first time in its 15-year history, Tesla has announced a profitable blocks. Total revenue in the fourth quarter amounted to $7,23 billion versus $3.29 billion a year ago.

Profit and loss Tesla quarterly © theverge.com

Total revenue for the year 2018 was $21.4 billion — another record for the company, but Tesla still reported a loss of $976 million for the year. Tesla also did not reach the ultimate goal of CEO Elon musk to receive an annual income, but he compensated for their losses and ended the year with $3.7 billion in cash. In his letter, Elon Musk wrote that 2018 was “the most important year in the history of Tesla”.

Earlier this month, Tesla announced that in 2018 it produced about 245,000 vehicles, including nearly 150 000 units of Model 3, the model became the best-selling premium car (including SUVs) in the US in 2018. In the fourth quarter, the company delivered 63 150 Model 3 electric vehicles to customers in North America. Throughout the year, Tesla has put 99 of 475 cars the Model S and Model X, in line with its recommendations. In the fourth quarter, the company has delivered to customers 27 550 electric Model X and Model S.

Quarterly production and delivery models © theverge.com

Thinking ahead

After two years and spent billions of dollars needed to run the Model 3 plus months of “production hell” and “hell delivery logistics”, Tesla begins work on the scale that Musk promised. The company also said it plans to raise from 360 000 to 400 000 electric vehicles in 2019, which represents a growth of approximately 45-65% compared to 2018.

Some analysts on wall street believe that demand for more expensive options Model 3 is released. And Morgan Stanley, and Deutsche Bank warned investors that Tesla could face the “air demand”, while Goldman Sachs said that “strong demand is a real issue.” This is partly due to the fact that Tesla is no longer eligible for the full Federal tax credit in the amount of US $ 7,500. And it is also because the company has not started production of the most affordable Model 3, which should start from $35 000.

If Tesla will launch an affordable Model 3 in production, this may create greater demand, but to make this version of the electric car and make a profit will not be easy. In fact, Musk told investors during the call in November that Tesla is still a lot of work to make electric car for $35 000 profitable. The company said that by the end of the year plans to produce about 7 000 Model 3 electric cars a week at its plant in Fremont, California.

Tesla may also continue to increase the demand for Model 3 by entering new markets. Currently Tesla car exports to China, the largest electric car market in the world, and also begin deliveries to Europe.

Earlier this month Tesla announced the layoffs, affecting about 7% of its employees. Musk said that the layoffs were necessary to allow Tesla to sell the Model 3 at a lower price, but it later turned out that there was reduced production hours for the Model S sedan and crossover Model X.

The company recently discontinued the cheapest version of the Model S and X with a battery capacity of 75 kWh, simplifying its lineup. But on Tuesday Tesla announced that the company has reduced the price of flagship models by releasing a limited options with the software. Since the battery will be no different, production costs will remain the same as in more expensive cars. How much sales can increase because of lower prices and the impact this will have on profit and cash, will be known in the coming months.

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