Tesla Inc. reported a small quarterly profit on Wednesday and predicted it would be profitable every quarter this year, despite the erosion of a federal tax credit that will cut into sales of its vehicles.
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. Tesla’s total revenue rose 5.9 percent to $7.23 billion.
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.
Tesla’s chief financial officer will leave the company as the automaker on Wednesday promised cheaper Model 3 sedans, the launch of Chinese production this year and profits in every quarter in 2019.
Chief Executive Elon Musk touted strong demand for the Model 3, as the company begins to ship the car to Europe and Asia from its Fremont, California factory. But he acknowledged it was paramount to cut costs to lower the price of the vehicle for a wider customer base.
Musk announced a 7 percent workforce reduction earlier this month, saying it was crucial to cut costs to roll out a lower-priced, yet still profitable, Model 3.