Tesla follows Musk warning with smaller profit than prior quarter

By Kate Gibson

/ MoneyWatch

Tesla CEO Elon Musk: The "60 Minutes" interview

After Elon Musk's recent warning of a "very difficult" time ahead, Tesla on Wednesday reported a much smaller profit for the fourth quarter than it saw during the previous three months. The company also projected it would be producing 7,000 Model 3s a week by the end of 2019.

The electric car maker reported a net profit of $139.5 million for the three months ending Dec. 31, compared with a $311.5 million profit in the third quarter, a time when it benefited from government credits for electric car purchases.

Musk on Jan. 18 announced thousands of layoffs and said Tesla was looking for a "tiny profit" in the first quarter — "with great difficulty, effort and some luck." The Tesla CEO also projected a fourth-quarter profit, but scaled back from the third quarter number.

Since introducing the Model 3 three years ago, Tesla's difficulties have ranged from production snags to cash shortages to Musk's famously eccentric behavior.

Tesla's production of the Model 3 has been rolling along steadily at more than 5,000 a week, but the company must soon compete with lower-priced electric cars in the works by rivals including Audi, as well as the reduced electric-car credits from the government.

Shares of Tesla were down 1.6 percent in after-hours trade, after ending the regular session Wednesday 3.8 percent higher.

First published on January 30, 2019

© 2019 CBS Interactive Inc.. All Rights Reserved.

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