Tesla Inc. on Wednesday reported third-quarter net income of $331 million, extending its record streak of profitability to a fifth quarter as it aims to deliver half a million vehicles in 2020.
The electric vehicle maker reported a 39 percent jump in revenue to $8.8 billion. It was aided by $397 million in regulatory credits sold to competitors. Automotive revenue jumped 42 percent to $7.6 billion. Its third-quarter automotive margin — 27.7 percent — topped the 25 percent mark for the third consecutive quarter.
Tesla CFO Zach Kirkhorn reiterated Wednesday on an earnings call that the company expects regulatory credit figures to more than double in 2020 compared with 2019.
"We are increasingly focused on our next phase of growth," Tesla said in a statement. "Our most recent capacity expansion investments are now stabilizing with Model 3 in Shanghai achieving its designed production rate and Model Y in Fremont expected to reach capacity-level production soon."
After delivering nearly 140,000 vehicles in the third quarter and 318,980 year to date, Tesla said its sticking by its target of 500,000 deliveries in 2020.
"Achieving this target depends primarily on quarter over quarter increases in Model Y and Shanghai production, as well as further improvements in logistics and delivery efficiency at higher volume levels," the company said.
Tesla shares gained 2.4 percent to $432.64 in midday trading on Thursday.
Out of rookie territory
"Tesla used to be considered the up-and-coming automaker, but with half a million units of planned annual production and a globally expanding presence it's safe to say that the company is well out of rookie territory,” Jessica Caldwell, Edmunds’ executive director of insights, said in a statement. “If it continues on this same path, it seems that Tesla will become a fairly mainstream automaker before the mid-point of this decade.”
In the near-term, the automaker is focused on completing construction of factories in Germany and Austin, Texas. The Texas plant will build its upcoming Cybertruck, which CEO Elon Musk on Wednesday suggested could begin shipping to customers late next year.
Musk said the automaker has begun to roll out a “Full Self-Driving” update to its Autopilot driver assist system on a limited number of test vehicles and will issue a “wide release” of the feature by the end of this year. Critics have panned Tesla for testing a new technology with the public that may not yet be ready for mass deployment.
The Q3 results came roughly a month after the company hosted a “Battery Day” event where it unveiled new in-house battery technology it believes will reduce costs and help it eventually build a $25,000 vehicle.