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Friday, April 23, 2021

Tesla poised to report a profit this quarter for the first time

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It’s difficult to say how deeply Tesla can hide its financials, though: The company already posts its quarterly results, and in the second quarter it traded shares. Its financial accounts for the third quarter won’t be posted until early November. But according to three Wall Street analysts, as reported by Bloomberg, the quarterly results may be a positive. The company posted a loss of $568 million for the first six months of this year.

Tesla said it aims to have “an all-time high vehicle production rate in the fourth quarter.” If it does that, by the end of the year, “we expect to post an operating profit in our vehicle business for the first time ever,” Elon Musk, the company’s CEO, wrote in a blog post announcing the plan. The company sold 14,180 cars in the first three quarters of the year. Its annualized rate of production is likely close to 140,000.

In the third quarter, the average prices of its Model S and Model X vehicles rose 6 percent, and its pre-tax profit rose 28 percent over last year.

Mr. Musk predicted that the company will be cash-flow positive in 2020. Tesla recently raised $1.8 billion from investors, and some say it has enough cash on hand to last it into next year.

It’s fair to think about a top-level split between profits and losses at Tesla, said Zach Gaub, a government relations consultant who focuses on the battery and electric vehicle sectors. While the Model S is relatively less expensive to run than most cars, the company is still heavy into selling higher-priced vehicles, he said.

“Tesla is trying to figure out how to make money at the low-end of the price scale, and how to make a little money in the middle,” Mr. Gaub said. “Just because they’re making money doesn’t mean they’re making money.”

And speaking of the Model 3, the compact sedan Tesla has on the launchpad, it may not see a wave of sales until it reaches lower prices and features, he said. Also, the federal tax credit is set to expire next year, Mr. Gaub said.

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