Tesla experienced a challenging quarter, but the latest sales figures bring some encouraging news. The automaker successfully delivered approximately 83,500 vehicles in the third quarter, which has the potential to alleviate investor concerns over supply chain issues and anticipated financial difficulties. Among the total deliveries, nearly 56,000 units were from the more affordable Model 3.
Production figures for the period fell slightly short of the delivery numbers, with Tesla reporting the manufacture of around 53,000 Model 3s. However, this production count remained within the company’s own expectations, showing stability amid previous difficulties.
Just a few months prior, Tesla was struggling with the ambitious target of producing 5,000 Model 3s weekly—a goal they had long aimed to achieve. Although the company did not meet that pace, the production levels were sufficient to support its aim for consistent profitability for the first time.
This positive turn of events was crucial for Tesla, especially following a tumultuous period. In August, CEO Elon Musk proposed an ill-fated plan to take the company private, which was subsequently met with a lawsuit from the Securities and Exchange Commission (SEC). The SEC accused Musk of misleading investors about securing financing for the transition to a private entity.
On the penultimate day of the quarter, Musk negotiated a settlement with the SEC involving a $20 million fine and agreed to resign as chairman, although he remains the CEO. This news was received with relief by investors on the following Monday.
Additionally, the company has seen a turnover in executive personnel, including the recent departure of its chief accounting officer, who lasted less than a month in the role. Following the production and sales reports, Tesla’s stock price experienced a decline of about 3%.
A more detailed report discussing revenue and profit margins is expected to be released later in the quarter, though specifics regarding those figures weren’t disclosed. It was noted that all Model 3s sold by the end of the quarter were higher-priced all-wheel-drive variants, equipped with dual electric motors.
In communication with his employees, Musk expressed optimism, indicating that the company was nearing its profitability goals. In his message, he emphasized the importance of solid performance on the last day of the quarter, underscoring how achieving sales targets could lead to exceeding expectations dramatically.
Historically, Tesla has only posted two quarters of modest profits since its inception a decade ago, accumulating total losses of approximately $6 billion during that time. The company is also facing a substantial debt challenge, with $1.2 billion set to mature in the next six months, prompting some financial analysts to suggest that Tesla may need to secure additional capital through stock or debt sales.
Musk insists that the revenue generated from vehicle sales will be sufficient to provide the necessary cash flow. However, he has acknowledged that reaching customers with deliveries has posed difficulties, thereby intensifying concerns regarding potential cash flow issues among investors.
In a previous update on social media, Musk humorously stated that the company had moved from “production hell” to “delivery logistics hell,” assuring followers that the delivery issues are manageable and that Tesla is making quick progress toward resolution.
As Tesla prepares to navigate these complex challenges, their recent sales figures offer a glimmer of hope for stakeholders looking forward to a more stable financial future.
