Elon Musk Pulls a Last Minute Miracle for Tesla
He’s sent dozens of satellites into space, is deeply interested in the advancement of artificial intelligence and currently is trying to bore a 30 foot wide, 50 foot long, 15 foot trench into the SpaceX campus in Los Angeles.
He even gave his plan to take Tesla private again away on Twitter long before it was able to be executed. One of two things is true about Elon Musk he’s an unstoppable force in the skin of a human or he’s a Bond villain. No one could have believed he’d be able to pull his electric car company out of the red any time soon, due to repeated failure to meet self-imposed production deadlines, but as it turns out, it doesn’t matter what Wall Street thinks. Musk is doing his own thing.
The Ups and Downs of Tesla and the Model 3
Tesla’s Model 3 was meant to be a car for the every man.
Musk’s grand vision was to get a bite of the mainstream car market while decreasing the number of pollution-generating cars on the roads. Initially, the Model 3 was supposed to come with a $35k sticker, but now that it has officially launched, the lowest priced models available are at a $46k price point.
This is still significantly more accessible than the Model S sedan and Model X SUV, both with price points around $100k, but investors expected that the extra 10K would turn off a lot of buyers, some that have waited far too long for their delivery. As it turns out, they need to have a little more faith in the hero (or Bond villain) of the story.
Snatching Victory from the Jaw of Defeat
Granted, Tesla had only shown one other quarter of profits since first quarter 2013’s $11.25 million, it was during third quarter 2016 and totalled $21.88 million.
So when he announced rather brazenly that he intended to see a profit in third quarter 2018, following a quarter with a huge loss of $717.54 million, analysts were generous to expect a profit of $191 million.
Musk surprised everyone with third-quarter profits of $311.5 million and a Model 3 that was among the best selling models in the US market. Even though the Model 3 had started production in 2017, Tesla struggled to make enough cars to keep up with demand. After all, the car company was initially founded around a specialty vehicle that didn’t require mass market presence, so going a little slow was no big deal.
With the demand for the Model 3 at an all time high, Tesla is expecting to deliver more than the 55,840 autos it delivered in the third quarter. Now that the logistics of building and shipping so many Model 3s have been worked out, it does look like it’s likely that Musk and Tesla will be having a very happy holiday season.