Tesla’s stock price has looked like a mountain on a pogo stick throughout the past few years. Wednesday saw another massive peak as the electric carmaker shocked analysts with a profitable third quarter. This marks its first profit since the fourth quarter of 2018.
A record number of cars being shipped out in FQ3 was the power that Tesla needed to keep investors happy. After the news about the surprise profit broke, the company’s shares jumped by as much as 17 percent. That marked the highest price for the stock since February. Now, Tesla is looking to build on that momentum by breaking into the Chinese market with its new Shanghai Gigafactory that is almost ready to start churning out Model 3’s.
Coming into the financial briefing, experts believed that Tesla would post an expected loss of 42 cents per share, per a CNBC report. As such, it came as quite a shock when the company posted massive earnings per share of $1.86 instead.
Nonetheless, the third quarter wasn’t all sunshine and rainbows. Tesla reported a total FQ3 revenue of $6.3 billion, just under the predicted amount. That number is down year-over-year from FQ3 2018 by about $520 million. Oddly enough, this marks the first time that Tesla has seen a decline in that metric since 2012.
However, the company isn’t too concerned. It claims that the dip in revenue is the result of more customers leasing their Tesla rather than buying it outright. The carmaker says that the number of leasing customers has tripled since it started offering the Model 3 as part of the program in April.
Tesla’s surprise profit comes thanks to the fact that it delivered 97,000 cars in the third quarter alone. That number is enough to set a record over the second quarter’s 95,356. Though impressive, Tesla will have to kick things into overdrive if it wants to reach CEO Elon Musk’s goal of shipping 360,000-400,000 cars this year.
Inside Tesla’s Chinese Gigafactory
Along with the financial reports, Tesla appeased its shareholders with a sleek 28-page update that included plenty of pictures of the company’s new Shanghai factory. According to reports, the factory is nearly ready to start producing Model 3’s. It has already started a few trial runs. As such, production will likely start earlier than the anticipated mid-2020 date.
Tesla is eyeing China as its next target for growth since the Communist nation is the world’s number one market for electric vehicles. Having cars come off the line in the same place that they’ll be sold will help Tesla sell even more.
With strong sales and a bright future ahead thanks to its Chinese Gigafactory, Tesla might finally be ready to pull itself out of the red for good.