Tesla reports strong deliveries for Model 3 in Q3

Tesla posted a surge in electric-car deliveries that could prove pivotal to earning an elusive profit, overcoming a series of distracting missteps by Chief Executive Officer Elon Musk.

The company handed over 83,500 vehicles in the third quarter, doubling its total in the prior three months. Of those deliveries, 55,840 were Model 3 sedans, in the range of what Tesla forecast as it finally started to mass-manufacture the sedan. Shares were little changed in pre-market trading.

The results could prove to be a watershed moment for Musk, who jeopardized his future with Tesla by prematurely claiming he had the funding and investor support to take the carmaker private.

Tesla and its supporters went to great lengths to boost deliveries as the quarter came to a close. Owners volunteered in droves at stores and service centers to help answer questions for customers, many of whom are new to electric cars. The company also offered incentives including free charging and referral-program perks to entice purchases.

Musk, 47, has been candid on Twitter about Tesla still having kinks to work out in smoothly getting cars into the hands of customers. He’s responded to several frustrated buyers to apologize for delays and said the company has left what he called “production hell,” only to end up in “delivery logistics hell.” Still, he said problems such as a shortage of vehicle carriers will be easier to solve than the manufacturing woes that plagued the company after Model 3 output began last year.

Tesla also pointed to headwinds that may have contributed to the reluctance to address profitability. Trade tensions between the U.S. and China have boosted tariffs on the company’s vehicles to 40 per cent, compared with 15 per cent for other imported autos.

To get around those duties, Tesla said it’s accelerating construction of a factory in Shanghai. The company sealed an agreement with the city’s government in July to start building its second car assembly plant in the world and said at the time that the first vehicles will roll off the line within roughly two years. It’ll take another two to three years for the factory to reach its capacity to build about 500,000 vehicles annually.

Money-manager Ron Baron, whose firm Baron Capital is Tesla’s 13th largest shareholder, according to FactSet, told CNBC that Tesla could generate $1 trillion in revenue by 2030 and could sell up to 15 million cars per year