Tesla posts 2nd ever profit as public company; Model 3 receives 373,000 pre-orders, set for 2H 2017 sale

For the second time in its history as a public company, Tesla recorded income of US$22 million (RM91.77 million) in this quarter, according to an Automotive Newsreport. The Palo Alto, California-based automaker attributed its gains to record production, deliveries and revenue.

A significant part of its third quarter revenue actually came from pollution credits it sold to other automakers, with US$139 million (RM579.87 million) in credits booked, up from US$39 million (RM162.71 million) one year ago, according to the report. Revenue from these credits are expected to decline in the fourth quarter, according to Tesla.

The decline is revenue from Zero Emission Vehicle Credit transfers is expected due to automakers selling more of their own electric vehicles, which reduces their need to purchase ZEV credit from Tesla. Additionally, a member of the California Air Resources Board told Bloomberg in August that may limit the amount of credits received by individual automakers when it reviews the program at the end of the year, putting an additional cap on potential revenue from emissions credit transfers.

Tesla can maintain its net income for the fourth quarter without the the credits, said Tesla CEO Elon Musk. “Expect gross margins to increase, that’s a huge factor. We’re using very few prototype parts and have had a bunch of design improvements and design cut-downs,” Musk said. The company’s upcoming model, the Model 3, has received 373,000 pre-orders and is expected to go on sale in the second half of 2017.

Meanwhile, construction of the battery ‘gigafactory’ in Nevada is on schedule to cater for the automaker’s future volume growth, while all new Teslas will have autonomous driving hardware installed, although software updates unlocking certain Autopilot functions missing on new cars (as the company validates the software with real-world driving data) will take at least three months to arrive.

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