Tesla promised it would swing to profitability and positive free cash flow in the third-quarter of 2018, and on Wednesday the company reported that it had achieved those goals in Q3.
Thanks to recent manufacturing changes that allowed Tesla to produce a higher volume of its latest car, the Model 3 electric sedan, Tesla reported GAAP net income of $312 million and free cash flow of $881 million.
In the earnings update, the company noted that customers who are buying the Model 3 are not just in the market for a premium sedan. They are trading in vehicles priced at or below $35,000 when new.
The company's cash position increased by $731 million in Q3 despite repaying $82.5 million of bonds, the company said. It expects flat or positive free cash flow next quarter as well, even with greater debt coming due.
The company said: "Our cash position should remain at least flat in spite of our plan to repay $230 million of convertible notes in cash during Q4."
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