Musk comes good on profit pledge as Tesla rolls into the black
Elon Musk delivered Wall Street his long-promised pledge of putting Tesla in the black late this evening, with shares soaring more than 12 per cent after the bell as the company produced its largest quarterly profit ever.
In one of the most highly anticipated reports of the third-quarter, electric car company trumped expectations after it made a net profit of $311 (£241m) in the third quarter of 2018, rising from a loss of $619.4m in the previous year.
The bumper results will come as relief for the firm’s entrepreneurial boss Musk, who had pledged to post quarterly profits in the second half of this year back in May.
Tesla sparked rumours that it would be moving into the black after revealing on Monday that results would be announced a week early, marking the first time the company had done so since it last reported profits in 2016.
However, the company has faced cynicism from investors within the last several months over the pace at which the electric car company has been burning through cash in order to meet production targets for its Model 3 sedan.
As part of an effort to build 5,000 units of the car per week – a milestone that was hit in the second quarter of this year – the firm has cut thousands of jobs and restructured major parts of its business model.
Today’s results are likely to give vindication to Musk’s ambitious production strategy, which has come against a backdrop of legal and financial controversies that have embrioled the firm’s charismatic boss in recent months.
Late last month Musk and Tesla were ordered to pay $40m to settle a deal with the US financial regulator over tweets Musk has made about possibly taking the firm into private ownership.
In July Musk also attracted legal threats after he called a British diver in a Thai cave rescue operation a “pedo” to his 22m followers.
The jump in share prices comes a day after Tesla's stock rose almost seven per cent, after a long-term critic of the electric vehicle manufacturer reversed its short position on the firm.