Tesla bulls have “much to celebrate”, says Jamie Powell in the Financial Times. As well as the profits, the firm is demonstrating “impressive cost control” and may bring forward the launch of its Model Y car. However, “Tesla cynics” also have a point. Revenues actually fell year-on-year and much of the profit-margin improvement was driven by “aggressive working capital management” – it is still heavily dependent on the “regulatory credit gravy train”. So while the short-sellers may be licking their wounds,“total capitulation from either side still feels like a long way away”.
Persistent problems include “a debt load of around $11bn, sales boosted by government subsidies to buyers and consistently missed production forecasts”, says Paul Vigna in The Wall Street Journal. Still, these results suggest that Tesla “is finally ready to stand on its own four wheels” as it moves towards becoming self-funding. Certainly, short-sellers seem to be in retreat – the percentage of stock shorted is down to 20%, from 24% in June and a “vicious” 60% seven years ago.