Photo: J Sullivan
The analysts across the world remained skeptical after Tesla’s recent report. The report, which has put the electric-car maker within reach of its goal for the year, was released on Wednesday. As per the report, the company will show a profit for the period.
The
company said it delivered 97,000 new cars in the third quarter, a rise of
almost 2 percent from the previous period. Production rose to 96,155 cars, a 10
percent increase. Tesla said that it took in a record number of net orders in
the quarter and that it was entering the fourth quarter with a growing backlog.
Tesla’s shares declined 4 percent in after-hours trading.
Elon
Musk, the chief executive of the company told the employees, through an email,
that the company had “a shot” at delivering more than 100,000 vehicles in the
quarter. He also added that the demand was strong.
Tesla
said it delivered 79,600 Model 3 sedans in the quarter, an increase of 2.6
percent from the second quarter. But deliveries of its larger, more established
offerings — the Model S and the Model X — totaled 17,400, a decline of 250.
Analysts say that is a problem for Tesla, since those vehicles often sell for
$90,000 and produce far more profit than the Model 3, which sells for as little
as $39,000.
Jeffrey
Osborne of Cowen & Company said in a recent note to clients that unless
Tesla cut costs enough to make money on the least expensive version of the
Model 3, “margins are likely to continue to be under pressure and we don’t see
sustainable profitability in the near to midterm.” He added that Cowen saw “a
lot more that can go wrong than can go right”.
Even
as it reported record deliveries and a substantial increase in revenue, Tesla
lost $408 million in the second quarter. Its third-quarter financial report is
due in the weeks ahead.
Tesla
has delivered about 255,000 cars. In order to reach the low end of the range it
has forecast for the year — 360,000 to 400,000 — it will need to sell more than
100,000 in the fourth quarter, only a slight increase from the third quarter
but a milestone it has not yet achieved.
Since
the introductions of the Model S in 2012, Tesla turned to be one of the top
producers of luxury cars in the United States. Though, it rivaled more
established brands like BMW and Mercedes-Benz. But the company has yet to turn
an annual profit since its founding in 2003.