Tesla just released its Q3 earnings and it shows a positive financial quarter. This is despite CEO Elon Musk’s recent public actions that garnered some backlash for the company. In total, Tesla made USD312 million (~RM1.3 billion) net income in the quarter. Tesla did note that its customers were willing to pay a premium for their cars compared to previous vehicles. A current Tesla 3 model costs USD46,000 (~RM191,860) but the company is hoping to bring down the cost to USD35,000 (~RM145,983) to better capture the low end of the market.
“In order to significantly increase the affordability of Model 3, we have decided to accelerate our manufacturing timeline in China,” the company wrote in its quarterly investor update letter. “We are aiming to bring portions of Model 3 production to China during 2019 and to progressively increase the level of localization through local sourcing and manufacturing. Production in China will be designated only for local customers.”
Production-wise, Tesla is already pushing out 4,300 vehicles on average which is 20% higher than initial targets. During Q3 alone, Tesla distributed more than 56,000 units of the Model 3 to its customers.
“Labour hours per Model 3 decreased by more than 30% from Q2 to Q3, falling for the first time below the level for Model S and X,” the company wrote. “In Q4, we will focus even further on cost improvements while continuing to increase our production rate.”
Tesla opened 4 new showrooms and service centres during the third quarter, bringing the total physical locations to 351. These showrooms are what drove a 20% increase of service revenue since the second quarter.
The company’s goal was to achieve 100,000 units of Model S and X by the end of 2018.