Tesla Motors has booked its first quarterly net profit since early 2013, and CEO Elon Musk is already looking forward to the possibility that the company would be able to do so again in the fourth quarter.
Tesla Motors reported a net income of $21.9 million, or 14 cents per share, swinging from a massive loss of $229.9 million, or $1.78 per share, from the third quarter of 2015. Revenue for the period was reported to be $2.3 billion, compared to analyst estimates of $1.9 billion, and much higher than the $936.8 million in revenue posted in the corresponding quarter last year.
The company has spent most of the past year working toward this blockbuster quarter, while making heavy investments in its manufacturing processes in preparation of the launch of the Model 3 electric vehicle, which is expected to roll out by the end of next year.
Toward that goal, Tesla Motors said that it has made substantial reductions in the required costs to launch the production of the Model 3 next year, with Musk telling analysts that the current plan will not require the company to raise extra capital for the upcoming high-volume electric vehicle. Tesla Motors might still look to raise cash for de-risking the business and to account for uncertainty though.
The profit that Tesla Motors booked for the third quarter was boosted by the company's record sales of its existing electric vehicles, along with the cost reductions and the sale of pollution tax credits to other car manufacturers. The company sold a combined 24,821 units of its electric vehicles, covering both the Model S sedan and the Model X SUV, for the quarter, which is more than double the total number of units sold in the third quarter of 2015.
The company is on track to meet its target of producing 80,000 vehicles this year, before its ambitious target of 500,000 cars in 2018.
Tesla Motors saw its shares shoot up by 5 percent to $212.05 each in after-hours trading upon the release of its third quarter results.
The sudden turnaround in the performance of Tesla Motors will help improve Musk's case in securing approval for the planned merger of the company with SolarCity, which Musk also owns. The merger might need extra cash though, with the combined company possibly needing a capital raise of $12.5 billion through 2018.
Barclays automotive analyst Brian Johnston, meanwhile, stated that Tesla Motors will need around $2.5 billion until the end of next year for the launch of the Model 3 and the completion of its Gigafactory in Nevada.
