Tesla Motors (NASDAQ:TSLA) has surprised investors and the market by reporting profit for the first time in three years. Before this, Tesla had reported losses consecutively for the last 13 quarters. Net income of the business for the third quarter stands at £17.9 million or $21.9 million, which is very impressive. A year back in the same period, the loss stood at $230 million.
The business went public in 2010 but hasn’t been able to show a quarterly profit since early 2013. Many analysts had shown concern as a result. In spite of the consistent losses, Tesla Motors has gone ahead with ambitious expansion plans.
It was further revealed that Tesla has delivered 24,821 automobiles in this quarter, which is 300, more than what was initially estimated. This is more impressive as the business had missed their production targets in the last two quarters.
Expenses have been rising for the business, as they are gearing up for the mass-market Model 3 saloon that is going to be launched next year. But that has been offset, thanks to the record number of deliveries.
The market reacted positively to these announcements. The Tesla stock jumped up 3.76 percent in after-hours trading.
By 2018, the business wants to sell 500,000 Model 3 automobiles every year. At a starting price of $35,000, it is the more affordable version of electric car.
Elon Musk Is a Happy Man
Chief Executive of the electric car maker, Elon Musk, who also heads SolarCity, issued a statement, saying, “We set new records for vehicle production, deliveries, and revenue. We were able to have our best quarter ever, and we are heading toward a great fourth quarter as well”. Our market share in luxury automobiles is increasing, he added.
The impressive results raises hopes the company’s expansion plans might be a success after all.
The Tesla-SolarCity Merger
Elon Musk, who is also the main financer of SolarCity, has for long been asking for a merger of the two businesses – Tesla Motors and SolarCity. Musk says this will create a diversified alternative energy conglomerate and will be good for consumers. The takeover of SolarCity is expected to cost Tesla $2.6 billion.
With these announcements, Tesla (NASDAQ:TSLA) has finally achieved an important milestone that its investors will be happy about. On November 17 shareholders are expected to cast their votes to decide the merger. The results could tilt the balance in favor of what Musk wants.