Tesla reports profit as issues stabilise

A visitor inspects a Tesla Model X electric vehicle at Brussels Motor Show, Belgium, January 18, 2019. Image copyright Reuters

Tesla made a profit of $139.5m (£106.4m) in the three months to 31 December – avoiding a loss for a second quarter in a row.

While lower than expected, the gain still marked an improvement for the electric car-maker, which has routinely reported shortfalls in recent years.

Tesla credited strong demand for its Model 3, manufacturing improvements and recent cost cuts for the turnaround.

It forecast strong growth, as Model 3 car sales start in Europe and China.

It said it expected to deliver 360,000 to 400,000 vehicles in 2019 – growth of approximately 45% to 65% compared to 2018.

“This year should be a truly exciting one for Tesla,” the firm said in a letter to investors.

The numbers

Tesla was under pressure last year, as it spent rapidly to improve production and get its latest car into the hands of customers.

The firm said those manufacturing issues have now “stabilised”.

However, it warned investors that deliveries would likely slow in upcoming months, as the reduction of a tax credit in the US lowers demand for its high-priced models.

It will also take longer to deliver cars overseas, it said.

In the most recent quarter, the firm earned $7.2bn in revenues, primarily from car sales, more than double the same period in 2017.

It also reduced its operating expenses by 7% from the prior quarter, to about $1bn, roughly the same as in 2017.

The decrease follows the announcement of thousands of job cuts in recent months, including about 3,000 in January.

Shares dropped by about 2.4% in after-hours trade in New York.

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