Tesla Inc (NASDAQ:TSLA) started selling Model 3 vehicle with an autopilot function in China from Friday. The autopilot equipped model 3 is priced at $50,310. It has discontinued the sale of Model 3 without autopilot ($46,389), the cheapest model, on its website in the country.
Shares edged higher on improved quarterly profits
The shares of Tesla have increased considerably this week on reporting better than expected quarterly results. However, the company has to prove that it would maintain higher profits going forward on initiating the production at Shanghai-based plant.
Tesla shares trade at $328.13, an increase of 9.49%, on the closing hours of October 25, 2019. Its shares have risen on account of cost-cutting measures and record deliveries. The cash balance of Tesla has increased to $5.3 billion on Wednesday. It has surprised investors with a profit per share of $1.86 against the expected loss of 42 cents/share.
Higher Q3 results are an essential factor for the redemption of Elon Musk, who relinquished chairman post after investors doubted the ability of Tesla to withstand the competition from global and more significant players, and the Tesla.
CEO promised to roll cheaper SUV in 2020
Elon Musk, Chief Executive Officer of Tesla, pledged to roll out more affordable SUV next year. The company will also make improvements in self-driving technology and stay ahead before the peers step into the premium electric vehicles segment established by Elon Musk. Tesla is confident of meeting the vehicle delivery target across the world.
Analyst at Hargreaves Lansdown, Nicholas Hyett, said Tesla might face cash crunch given the fast pace of expansion. Tesla is ahead of schedule to introduce Model Y in 2020. The company has to reduce costs while establishing a large factory in Europe.
Tesla has cut the costs by 16% yearly on the backdrop of improved operational efficiency and a reduction in material and production costs. According to Elon Musk, the company is benefitting from reduced operational costs since the manufacture of Model 3. Chief Financial Officer of Tesla, Zach Kirkhorn, said the company expects higher margins for Model Y when compared to Model3 because the production costs are the same.