Tesla reports profit, explains $46k Model 3 Mid Range model, hints about leasing

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2018 Tesla Model 3

2018 Tesla Model 3

Tesla’s quarterly earnings call today was shaping up to be, at long last, an earnings call.

Tesla reported a net income of $312 million for the third quarter of 2018. The all-electric vehicle maker made money.

It also claimed that, given its financial results—and some creative number-crunching—it has the best-selling car in the U.S. on a revenue basis. And it reaffirmed that it’s the fifth-best-selling model by volume.

In final delivery numbers for the quarter, the company reported 56,065 Model 3 sedans and 27,710 Model S sedans and Model X crossovers during the quarter—a total of 83,775 vehicles.

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Tesla says that nearly 70,000 of those vehicles were delivered to the U.S. And it reported that Model S and Model X will continue to be impacted by a 40 percent import duty in China, but the automaker is working to accelerate its manufacturing timeline for China with more localized versions of the Model 3 for that market.

2018 Tesla Model 3

2018 Tesla Model 3

The financial results, while the cause for tempered celebration, weren’t all of it. As can be expected from Tesla, some of the most revealing statements the automaker has made in some time were nested within the financial update.

One such passage proved to be a bit of an explainer on why it opted to roll out the Model 3 Mid Range this past week: “Based on trade-ins received from customers since the start of Model 3 production, more than half of those trade-in vehicles were priced below $35,000 when new. It is clear that customers are trading up their relatively cheaper vehicles to buy a Model 3 even though there is not yet a leasing option and the Q3 starting price of a Model 3 was $49,000.”

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Tesla also included a long-anticipated update on reservations. Out of the 455,000 net reservations it claimed to have in August 2017, it says that less than 20 percent have cancelled.

“We are expecting most of the remaining reservations to gradually convert to orders as we launch more versions of Model 3, introduce other financing options, and begin sales outside North America,” the company declared.

With multiple hints about leasing (or some other kind of financing, like a subscription plan), and the more supportive financial results, it could be the time for Tesla to offer such a program.

 
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