Tesla may have struggled through “production hell” to build the Model 3, but the car has helped the company set a new record: $4 billion in revenue in the second quarter of 2018, according to an earnings report published on Wednesday. It also reached another milestone: the Model 3 is finally starting to make Tesla some money. The Model 3’s gross margins, a measure of the revenue that the company retains after costs associated with producing it, turned “slightly positive” in Q2, according to the company. That’s despite the fact that production was still ramping up and that Tesla had yet to ship any of the expensive All-Wheel Drive performance versions of the car. “This was a significant achievement in the ramp of Model 3,” the company concludes in a letter to investors released with the report. Until recently, Tesla had been losing money on every Model 3 that it shipped. Tesla says that the Model 3’s gross margin “should grow significantly” to approximately 15 percent in the third quarter and 20 percent in fourth quarter, thanks to “continued reduction in manufacturing costs and to some extent an improving mix.” “We expect to produce 50,000 to 55,000 Model 3 vehicles in Q3, which will represent an increase of 75% to 92% from the prior quarter,” Tesla says. “Deliveries should outpace production in Q3 as our delivery system stabilizes.” Tesla says it is continuing to produce “approximately” 5,000 Model 3s a week, a goal which it first achieved in late June…. [Read full story]
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