When Tesla (TSLA) produced 5,000 Model 3s per week at the end of the second quarter, it didn't result in a linear line of production progress. But it did mark a turning point for management's credibility, a point I made back in the summer. Much to the chide and snark of bearish investors, I felt that Musk was beginning to provide more realistic outlooks that investors could count on with more reliability.
Then the company delivered a profit and positive free cash flow in the third quarter. It will likely do so in the fourth quarter as well. Tesla recently introduced a mid-range Model 3, lifting consumers' hopes that development on the short-range Model 3 is making progress.
Coming through on these expectations add credibility to Tesla's management team, in my view, because what they say becomes more likely to come true. Unlike when CEO Elon Musk would make bold promises, only to see the results fail to come to fruition or take far longer than expected.
Musk isn't perfect and even he acknowledges his past tendencies to over promise and under deliver. "I think I do have an issue with time," he said at Tesla's annual meeting last June. Like Model 3 production, Musk's timeline estimates are improving dramatically this year -- and that's something bulls and customers alike are excited about.
For starters, delivering on those promises is giving hope to investors that Tesla's global ambitions have a shot at reality. Tesla is looking to build out its Gigafactory in China faster than expected to help meet demand in the country. It's also looking to build a factory in Europe as well.
But European customers won't have to wait for a factory to be built before getting their hands on a new Model 3. Emails are now going out to customers throughout Europe as Tesla gears up to show off the Model 3 and begins filling its showrooms with the vehicle.
The automaker is inviting registration holders to the events and hopes to soon get the production line moving. On the company's most recent earnings call, Musk said Tesla is aiming to build a production batch for Europe in January. The goal will be to begin delivering in February or March.
Just as investors have been able to rely on Musk & Co. more lately, so too have Tesla's customers. Hopefully those in Europe won't be disappointed.
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