Tesla Reports First Quarterly Profit In Nearly Three Years

On October 26, Tesla Motors reported its first quarterly profit since the first quarter of 2013. Thanks in part to a Herculean effort by everyone in the company to build and deliver as many cars as possible in the third quarter, Tesla had net income of $21.9 million, or 14 cents per share, for the third quarter that ended Sept. 30. In the third quarter last year, the company reported a loss of $229.9 million, or $1.78 per share. Total revenue more than doubled to $2.30 billion.

Tesla Q3 earnings report

Tesla delivered 24,821 cars in the third quarter. For the first time, a significant number of them were Model X SUVs, which are some of the most expensive cars the company sells and are therefore among its most profitable offerings. It also released its newest 100 kWh battery in the third quarter. That unit is only available for the time being in the Model S and Model X in P100D trim with Ludicrous Mode enabled. That combination adds $20,000 to the regular price of the cars in which it is installed and helped Tesla take in more money in the third quarter.

Offsetting some of that revenue increase, the company also introduced a lower-priced entry-level model, the Model S 60. Not to be confused with the original Model S 60 which retailed for $66,000, the new offering actually has a 75 kWh battery installed but it is software limited to 60 kWh and retails for $60,000 — a relative bargain in the high-flying world of Tesla. The Model S P100D with Ludicrous retails for more than double that amount. The software limitation can be removed at any time during the life of the car for an additional sum of $8,500.

With all that is going on with its cars, Tesla is continuing to expand its network of Supercharger locations. As of the end of September, there were 715 of them worldwide with a total of 4,416 individual charging stations. In addition, Tesla has 3,222 destination chargers with 5,547 connection points globally as of the end of the third quarter. Destination charging offers convenient charging at hotels, restaurants, and shopping centers.

Tesla’s grid storage business is also growing. In the quarter that just ended, it was selected to build and install the world’s largest grid storage system at the Southern California Edison Mira Loma substation to help reduce rolling blackouts. When complete, it will store enough electricity to power 2,500 homes for up to 24 hours. Production of batteries for electrical storage has begun at the Gigafactory in Nevada and is expected to increase substantially in coming quarters.

Tesla stock rose more than $6 per share after the earnings report was released. Of 20 analysts covering the company, seven have a “sell” rating on the stock, four rate it “buy” or higher, and nine have a “hold,” according to Thomson Reuters data.

Source: Reuters

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.