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Tesla Inc. reported a net profit, positive cash-flow, and wider-than-expected margins for the most recent quarter, delivering on a promise made by Chief Executive Elon Musk to turn the electric carmaker into a profit-making business with high production volumes of its new Model 3 began to pay off.

Tesla emphasized that it expected to maintain and repeat its net profit in the current quarter, boosting the company’s shares up 14 percent during the after-hours trading.

Musk, who is controversial and has often set goals and deadlines that Tesla failed to achieve, surprised investors by delivering on his pledge to make Tesla profitable for only the third quarter in its 15-year existence, providing a positive end to a difficult quarter for the chief whose leadership came under fire only some weeks ago.

“We can actually be cash flow positive and profitable in all quarters going forward,” said Musk, adding that he did not include those in which a big debt payment comes due, such as the first quarter of 2019. He also stressed that Tesla at present doesn’t plan on raising equity or debt.

Tesla said that it would start taking orders in Europe and China for the Model 3 before the end of the year. Deliveries would start to Europe in late February or March, and those to China in the second quarter, if not before.

Musk also said that he planned to start local production China next year in a “capital-efficient manner,” indicating that the company might use a similar tent structure for car assembly. Such a structure has already been used at its Fremont, California plant, although he gave no further details on the company’s plans in China.

Meanwhile, seeking to dispel rumors that a large number of prospective buyers had canceled their reservations because of delays receiving their cars, Tesla stated that only 20 percent of North American reservation-holders had canceled their bookings.

Free cash flow that was at $881 million was positive for only the third time in Tesla’s experience. It was also supported by an increase in production of the Model 3, as well as lower capital expenditures and more efficient use of working capital.

While it was still lower than the production target that it set for June of 5,000 Model 3s per week, the roughly 4,300 Model 3s the company is now averaging per week were enough to improve results.

In spite of the promises by Musk and Chief Financial Officer Deepak Ahuja to manage operations and upcoming projects in a capital-efficient manner, some Wall Streeters still predicts a capital raising as probable at some point.

“(Raising cash) became a whole lot easier,” after the results, said Tigress Financial Partners analyst Ivan Fienseth. “He will need to do it, right? But if you got a profitable company it’s whole lot easier to raise money.”

Exceeding Estimates

The results were a boost for the embattled company after a quarter in which US security regulators alleged fraud on Musk for tweeting that he had already secured funding for a deal to take the automaker private, which never happened.

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A settlement between Musk, along with Tesla, and the US Securities and Exchange Commission enabled Musk to remain as CEO, but required a new independent chairman to oversee an string of capital-intensive new projects in 2019, from a factory in China to the creation of Tesla’s new Model Y SUV.

Musk had pledged since May that the automaker would be profitable in both the third and the fourth quarters, reiterating that the company wouldn’t need new capital from financial backers.

Tesla said earlier this month that it had built 53,239 Model 3 sedans in the quarter, in line with its target of 50,000 to 55,000 vehicles. It delivered 56,065 of the cars to the customers.

Musk has been under increasing pressure to prove that he can deliver consistent production numbers for the Model 3, seen as crucial to Tesla’s profitability and its ability to be a high-volume car producer.

More sales of the higher priced version of the Model 3 currently on offer aided margins which jumped to over 20 percent in the quarter, Tesla stated, higher than its estimate of 15 percent margins. Lower labor hours per vehicle helped, as did lower material costs.

Total revenue more than doubled to $6.82 billion, exceeding estimates by analysts of $6.33 billion, according to Refinitiv data.

Tesla finished the quarter with $3.5 billion in cash after dishing out $510.3 million in quarterly capital expenses. It stated that cash would remain at least unchanged in the fourth quarter, in spite of a repayment of $230 million in convertible notes coming due.

The automaker reported a profit of $311.5 million, or $1.75 per share, for the third quarter that ended on September 30, compared with a loss of $619.4 million, or $3.70 per share, a year earlier.

Not including items, earnings were $2.90 per share, against an average analyst estimate of a loss of 19 cents per share. A Refinitiv SmartEstimate, which gives more weight to analysts with strong track records, estimated the company would earn 3 cents per share.

At present, the company is facing heavy cash needs at its Fremont, California factory, where the company has had its longstanding goal of eventually ramping up production to 10,000 Model 3s per week. Musk said a goal of 7,000 was more realistic and would need significantly less capital spending.

Three new vehicles are in development at Tesla: the Model Y, a new $200,000 Roadster and an electric heavy-duty truck that Musk unveiled last November.

Its enormous Gigafactory battery factory outside Reno, Nevada is only partially finished, and plans for assembly plants in Europe and China are both big-ticket items up on the horizon.

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