Tesla Inc. posted a surge in electric-car deliveries that could prove pivotal to earning an elusive profit, overcoming a series of distracting missteps by CEO Elon Musk.
The company handed over 83,500 vehicles in the third quarter, doubling its total in the prior three months. Of those deliveries, 55,840 were Model 3 sedans, in the range of what Tesla forecast as it finally started to mass-manufacture the sedan. Tesla shares fell 3.1 percent to close at $301.02.
The results could prove to be a watershed moment for Musk, who jeopardized his future with Tesla by prematurely claiming he had the funding and investor support to take the carmaker private. He settled fraud charges brought by the Securities and Exchange Commission last week by agreeing to pay $20 million and step down as chairman. The agency initially sought to bar him from serving as an officer or director, a pursuit that would have overshadowed the progress the company has made in manufacturing more vehicles.
Tesla produced 53,239 Model 3s in the quarter, in line with the 50,000 to 55,000 range that the company had forecast. An additional 8,048 of the sedans were in transit to customers.
Tesla and its supporters went to great lengths to boost deliveries as the quarter came to a close. Owners volunteered in droves at stores and service centers to help answer questions for customers, many of whom are new to electric cars. The company also offered incentives including free charging and referral-program perks to entice purchases.
Musk, 47, has been candid on Twitter about Tesla still having kinks to work out in smoothly getting cars into the hands of customers. He’s responded to several frustrated buyers to apologize for delays and said the company has left what he called “production hell,” only to end up in “delivery logistics hell.”
Still, he said problems such as a shortage of vehicle carriers will be easier to solve than the manufacturing woes that plagued the company after Model 3 output began last year.
Meanwhile, Tesla warned of major problems with selling cars in China due to new tariffs that would force it to accelerate investment in its factory in Shanghai.
Tesla said it was speeding up construction of its Shanghai Gigafactory to combat a huge competitive disadvantage against other producers and even other imported cars, which carry a lower 15 percent tariff.
"Tesla is now operating at a 55 percent to 60 percent cost disadvantage compared to the exact same car locally produced in China," the company said.
Musk in July landed a deal with Chinese authorities to build a new auto plant in Shanghai, its first outside the United States and a key to doubling its global capacity.
Reuters contributed to this report.
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