Tesla beat its Model 3 production goal, but will it hit profitability?

Tesla beat its Model 3 production goal, but will it hit profitability?

Tesla beat its Model 3 production goal, but will it hit profitability?

Although it successfully reached its production goals for the third quarter, getting those vehicles into the hands of consumers has proven to be a headache.

In total, the company produced 80,142 cars across all models. In the last week of the quarter, we produced over 5,300 Model 3 vehicles, nearly all of which were dual motor, meaning that we achieved a production rate of more than 10,000 drive units per week. That's slightly better than its second-quarter performance and in line with its full-year guidance.

"We continue to forecast Tesla's economics now starting to flip from cash-burn to cash generation off the big vertically-integrated fixed-cost structure it has been building; as its execution hurdles progressed from battery module production 2-3 quarters ago, then to automated general assembly, to now simply the logistics of shipping/ hauling Model 3 deliveries fast enough", the analyst continued.

Tesla Inc. posted a surge in electric-car deliveries that could prove pivotal to earning an elusive profit, overcoming a series of distracting missteps by Chief Executive Officer Elon Musk.

A network of short sellers has been tracking the number of cars on the lots and has speculated that some may be unsold inventory, because Tesla has built more high-priced Model 3s than it has orders for-while customers who have put down deposits for base, $35,000 versions have to wait.

"Tesla is now operating at a 55 per cent to 60 per cent cost disadvantage compared to the exact same vehicle locally produced in China", the company said. This makes for a challenging competitive environment, given that China is by far the largest market for electric vehicles. According to Tesla's statement, "8,048 Model 3 vehicles and 3,776 Model S and X vehicles were in transit to customers at the end of Q3, and will be delivered in early Q4". Still, he said problems such as a shortage of vehicle carriers will be easier to solve than the manufacturing woes that plagued the company after Model 3 output began previous year.

We want to thank the entire Tesla team for executing so well during this challenging ramp up in deliveries.

Tesla announced Tuesday that it delivered 55,843 Model 3s between July and September, confirming reports that the company's mass-market electric is the fifth bestselling vehicle model in the United States.

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