Tesla predicts profit in every 2019 quarter despite vanishing tax credits
Tesla Inc eked out a small quarterly profit on Wednesday and predicted it would be profitable in the first quarter, but acknowledged that the erosion of a federal tax credit in 2019 would cut into sales of its vehicles, disappointing investors.
The electric car maker reported a smaller fourth-quarter profit compared with the previous three months and said Model 3 production volume in California should reach 7,000 units per week by the end of the year.
The company said it made a net profit of $139.5 million in the three months ended Dec. 31, compared with a $311.5 million profit in the third quarter, when it benefited from regulatory credits.
Shares of the company fell nearly 3 percent as Tesla missed analysts' expectations for quarterly profit. Excluding items, Tesla earned $1.93 per share. Analysts had expected a profit of $2.20 per share, according to IBES data from Refinitiv.
Tesla also said its optimistic target was to achieve a very small GAAP net income in the first quarter.
The company said, barring unexpected challenges with Gigafactory Shanghai, it was targeting annualized Model 3 output of more than 500,000 units sometime between the fourth quarter of 2019 and the second quarter of 2020.
That 500,000 annual target was originally expected to have been met in 2018.
Reporting by Sonam Rai in Bengaluru and Alexandria Sage in San Francisco; Editing by Bernard Orr and Lisa Shumaker
