Tesla share price gets into gear after company shows profit in third quarter
Shares in Tesla have shot up 7.5 per cent today after the company moved into the black in its third quarter results.
The carmaker last night said it had turned a $619m (£241m) loss into a profit of $311m in the last three months.
Revenue reached $6.82bn, smashing estimates from Refinitiv of $6.33bn.
The results will come as a relief for under-fire chief executive Elon Musk, who was recently fined and forced to step down as chairman by the Securities and Exchange Commission over a tweet it said was misleading.
But the company is also facing criticism that it overspent to hit production targets for its Model 3 sedan.
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?
“To say Tesla’s answer is emphatic is an understatement. Gross margins on the Model 3 are above even the company’s own lofty expectations and its position as the 5th most popular car by volume in the US suggests it’s drawing in a wide range of customers despite its comparatively high price point.
“Drivers will pay more for Musk it would seem. That’s important because the premium end alone won’t deliver the impressive growth Tesla needs in the coming years to justify its premium valuation.
“Normally we’d tell investors to avoid reading too deeply into a single quarter’s numbers, but this quarter really counted at Tesla. Reading deeply is something of pleasure today.”