Published: Sat, October 27, 2018
Business | By Eloise Houston

Tesla says has not received subpoena on Model 3 production

Tesla says has not received subpoena on Model 3 production

Speaking to analysts following the company's Q3 earnings release, CEO Elon Musk said he has already approved the final prototype for the all-electric crossover.

Tesla surprised the markets by reporting a third quarter profit of $311.5 million, compared with a loss of $619.4 million in the same period during 2017.

Tesla Inc and Elon Musk have agreed to pay $20 million each to financial regulators and the billionaire will step down as the company's chairman but remain as chief executive, under a settlement. Specifically, its sources said investigators are "homing in on whether the company made projections about its Model 3 production knowing it would be impossible to meet the goals".

In 2018, the losses Tesla has twice hit record in first quarter, the company lost $ 709 million and the second $717,5 million, more than twice that of 2017.

Model 3 cars start at about US$50,000, despite a Tesla goal of making an electric auto priced for the masses. Gross margins on the Model 3 are above even the company's own lofty expectations and its position as the 5th most popular auto by volume in the USA suggests it's drawing in a wide range of customers despite its comparatively high price point.

Electric auto advocates are wildly pointing to this news, loudly declaring that automakers should note that electric vehicles are profitable to make. Touching on this point late past year, Musk said that the "Model Y will, in fact, be using substantial carry over from Model 3 in order to bring it to market faster" and that it will "have relatively low technical and production risk as a result". In our opinion, one of the most important debates for Tesla is when they can become self-sufficient on free cash flow, reducing the need to tap the equity market.

Musk envisioned a day when Tesla owners would be able to make their autonomous cars part of a ride-sharing fleet run by the company.

Tesla Inc.’s
Tesla Inc.’s

While the unveiling of the Model Y is a bit atypical, what we'll see in March will probably be really close to, if not exactly the same as, what customers can expect to drive in 2020.

Musk hinted that Tesla's business model would be more like accommodation service Airbnb, with customers able to "offer their auto, add or subtract to the fleet at will".

Tesla only reached a goal to build 5,000 Model 3s per week in June, although current production has fallen short of that.

A big jump in Tesla's output of its mass-market Model 3 vehicle powered the breakthrough.

"We will also have a factory in Europe long term, because it is pretty silly to make cars in California and ship them to Europe", Musk said.

Tesla shares closed higher for the sixth time in the past ten trading sessions on NASDAQ on Thursday.

Things may finally be turning around for Tesla. The starting price for the Model 3 was Dollars 49,000 in the quarter, but the Company is working to bring the price to USD 35,000.

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