Tesla posted a $139 million profit in the fourth quarter of 2018, the first time the electric car company has recorded back-to-back profits, in its 15 year history.
In a jubilant investor letter, posted on Wednesday, explained it was only the company’s fourth profitable quarter ever. The California-based company also generated a record-breaking $7.2 billion in revenue for the quarter.
“Last year was the most pivotal year in Tesla’s history. During our Model 3 production ramp, we went through significant challenges with the battery module line at Gigafactory 1 in Nevada, and later with our general assembly line in Fremont. Thanks to the hard work and ingenuity of our manufacturing teams, by mid-2018 we successfully overcame these challenges and stabilized Model 3 production at high volumes."
Model 3 sells well across the US to boost profits
"Model 3 then went on to become the best-selling passenger car in the US in terms of revenue in both Q3 and Q4. With nearly 140,000 units sold, Model 3 was also the best-selling premium vehicle (including SUVs) in the US for 2018 – the first time in decades an American carmaker has been able to secure the top spot,” the letter reads.
Despite the great quarter, Tesla still posted a $1 billion loss across the year. But steady hard work by the company has seen the company gradually reduce its losses, and it finished the year with $3.7 billion in cash.
Tesla’s CFO Deepak Ahuja has announced he is leaving the company in a few months. He is among a series of leadership changes in the company with both Tesla’s chief accounting officer and head of global finance also exiting in recent months. Zach Kirkhorn, vice president of finance at Tesla, will take over Ahuja’s role.
Tesla inches closer to full profitability
Comparing Tesla’s 2017 statistics with numbers from 2018, it is almost hard to believe it's the same company. Tesla says they made around 253,000 cars in 2018 and delivered about 245,000 of those.
Approximately 140,000 of those were Model 3s. In the fourth quarter of 2018, 63,359 Model 3s were delivered compared to 1,550 in 2017.
Tesla is finally getting close to the production standards and goals that Elon Musk has been aiming for, and they are showing no signs of slowing down.
The company said on a call with analysts on Wednesday that it hopes to deliver 360,000 to 400,000 cars total in 2019, an increase of 45 to 65 percent over 2018.
Despite the growth, analysts are cautious about the months ahead because Tesla no longer qualifies for the $7,500 federal electric vehicle tax credit.
The EV tax credit which was started under the Obama administration was designed to taper out once an EV automaker delivered its 200,000th eligible car in the US. As a result, the federal electric vehicle tax credit will be lowered to $3,750 new Tesla purchases after the January 1st, 2019.