Today, the shares in Tesla the electric car maker, have shot up by 7.5 percent after the company moved into the black in its third quarter results.
Last night, the carmaker has announced that the company was able to turn a $619 million (£241 million) loss into a profit amounting to $311 million in the last three months.
The revenue of the company reached $6.82 bilion. The amount smashed the estimates from Refinitiv amounting to $6.33 billion.
The results that were announced by the company will come as a relief for Elon Musk, the under-fire chief executive of Tesla who was recently imposed with a fine and forced to step down as the chairman by the Securities and Exchange Commission of the United States of America over a tweet that the SEC said was misleading.
However, the company is also facing criticism that it resulted to overspending just to hit its production targets for its Model 3 sedan.
Nicholas Hyett, an analyst from Hargreaves Lansdown, stated: “Production numbers earlier this month meant we already knew Tesla could churn out the cars, the question was whether it could it do it profitably, and even more importantly, could Musk wean the company off a constant flow of cash from investors?”
He added: “To say Tesla’s answer is emphatic is an understatement. Gross margins on the Model 3 are above even the company’s own lofty expectations and its position as the 5th most popular car by volume in the US suggests it’s drawing in a wide range of customers despite its comparatively high price point.”
He continued: “Drivers will pay more for Musk it would seem. That’s important because the premium end alone won’t deliver the impressive growth Tesla needs in the coming years to justify its premium valuation.”
The analyst concluded: “Normally we’d tell investors to avoid reading too deeply into a single quarter’s numbers, but this quarter really counted at Tesla. Reading deeply is something of pleasure today.”