Tesla Turns Another Profit As CFO Heads Out the Door

Steph Willems
by Steph Willems
tesla turns another profit as cfo heads out the door

Tesla CEO Elon Musk waded through his company’s entire fourth-quarter earnings call before springing the news that two-time chief financial officer Deepak Ahuja is headed for retirement. It seems likely that Ahuja’s second retirement will be permanent.

Ahuja presided over a year Musk called the most challenging in Tesla’s history. Previous statements from the CEO suggested a second consecutive profitable quarter, and that’s just what Tesla announced last night: a $139.5 million profit in Q4 2018. That’s down from the previous quarter’s $311 million, but far and away better than Q4 2017’s $675 million loss.

It’s also a first for Tesla.

Never before has the company seen two profitable quarters line up next to each other, and with good reason. Before Q3 2018, the company’s list of profitable quarters held a single entry.

With Model 3s pouring out of Fremont at a steady clip, Tesla’s Q4 revenue of $7.23 billion beat analyst estimates, while its pile of available cash ($3.7 billion) continues to grow. It’ll need a chunk of that cash soon. The company has a $920 million convertible bond that matures in March, but Musk and Ahuja told investors the company is in a position to “comfortably” pay it off.

Forecasting deliveries in the 360,000 to 400,000 vehicle range for 2019, Musk said investors can expect profits going forward, with only Q1 2019 warranting a question mark. He also said that if the long-feared recession does appear this year, Tesla deliveries will still rise 50 percent. That said, this quarter’s Model 3 deliveries might fall in the U.S. as Tesla begins shipping the sedan overseas.

Speaking of overseas, the company’s Shanghai assembly plant will crank out 3,000 Model 3s per week by the middle of next year, Musk said. The Model Y, Tesla’s upcoming compact crossover, will appear by the end of 2020.

Tesla’s standard battery Model 3 — the $35,000 car promised by Musk during the model’s launch three years ago — should arrive this summer.

As the company cuts staff and rearranges trims and pricing, a new threat looms: competition. Tesla is no longer operating in a vacuum, and luxury automakers the world over are keen to beat the California company at its own game. Michael Dean, an analyst with Bloomberg Intelligence, commented that, “Tesla’s effective premium monopoly is also over with competition coming through in 2019 from Porsche, Audi and Mercedes.”

Edmunds analyst Jessica Caldwell said that, despite the bright points in its Q4 report, Tesla still faces an uphill climb.

“Things really aren’t going to get any better for Tesla in the U.S. than they did at the end of 2018,” she told CNBC. “Turning a profit, creatively addressing production challenges and getting the Model 3 to the masses were huge milestones, but keeping up this momentum is going to be virtually impossible.”

[Sources: Bloomberg, CNBC]

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  • SatelliteView SatelliteView on Jan 31, 2019

    So, model S outsold MB S-class, BMW 7-series and Audi A8, I think combined(?) Now model 3 outsold C-class, 3-series, and A4. Yet Mask is incompetent. You guys are jocking

    • See 1 previous
    • Art Vandelay Art Vandelay on Feb 03, 2019

      @conundrum It is true...they have a lot going for them...but they have some QC issues that people wouldn't have put up with on a Chevy Citation.

  • SatelliteView SatelliteView on Feb 01, 2019

    Take a step back and tell me what other automotive company has done everything 100% perfect? Also when was the last time business did not pray on people gullibility? By your logic US is a shitty country because of a few flaws. Are you a cultural Marxist, by any chance?

  • Denis Jeep have other cars?!?
  • Darren Mertz In 2000, after reading the glowing reviews from c/d in 1998, I decided that was the car for me (yep, it took me 2 years to make up my mind). I found a 1999 with 24k on the clock at a local Volvo dealership. I think the salesman was more impressed with it than I was. It was everything I had hoped for. Comfortable, stylish, roomy, refined, efficient, flexible, ... I can't think of more superlatives right now but there are likely more. I had that car until just last year at this time. A red light runner t-boned me and my partner who was in the passenger seat. The cops estimate the other driver hit us at about 50 mph - on a city street. My partner wasn't visibly injured (when the seat air bag went off it shoved him out of the way of the intruding car) but his hip was rather tweaked. My car, though, was gone. I cried like a baby when they towed it away. I ruminated for months trying to decide how to replace it. Luckily, we had my 1998 SAAB 9000 as a spare car to use. I decided early on that there would be no new car considered. I loathe touch screens. I'm also not a fan of climate control. Months went by. I decided to keep looking for another B5 Passat. As the author wrote, the B5.5 just looked 'over done'. October this past year I found my Cinderella slipper - an early 2001. Same silver color. Same black leather interior. Same 1.8T engine. Same 5 speed manual transmission. I was happier than a pig in sh!t. But a little sad also. I had replaced my baby. But life goes on. I drive it every day to work which takes me over some rather twisty freeway ramps. I love the light snarel as I charge up some steep hills on my way home. So, I'm a dyed-in-the-wool Passat guy.
  • Paul Mezhir As awful as the styling was on these cars, they were beautifully assembled and extremely well finished for the day. The doors closed solidly, the ride was extremely quiet and the absence of squeaks and rattles was commendable. As for styling? Everything's beautiful in it's own way.....except for the VI coupe....it's proportions were just odd: the passenger compartment and wheelbase seemed to be way too short, especially compared to the VI sedan. Even the short-lived Town Coupe had much better proportions. None of the fox-body Lincolns could compare to the beautiful proportions of the Mark V.....it was the epitome of long, low, sleek and elegant. The proportions were just about perfect from every angle.
  • ToolGuy Silhouetting yourself on a ridge like that is an excellent way to get yourself shot ( Skylining)."Don't you know there's a special military operation on?"
  • ToolGuy When Farley says “like the Millennium Falcon” he means "fully updatable" and "constantly improving" -- it's right there in the Car and Driver article (and makes perfect sense).