2016 Tesla Model X: Turning Point To Profitability

All this while Tesla has been carried by the Model S, but by the end of last year the Model X was waiting to breakthrough after being held down by production difficulties.

Now that the sluggish production rates are more or less dealt with, the crossover is set to take the automaker over the line into the region of profitability for the first time this year.

This jump from the red into the green has been heralded by a $179 million positive cash flow in Q4 2015, the first time the company has ever done so. The company’s expected leap into profitability is not going to be detracted by heavy investments to boost production rates and initiate Gigafactory works on battery cell manufacturing.

While it is easy to attribute this incoming turnaround to the Model S which sold over 25,202 units in the US and 50,366 worldwide, the sorting out of problems with the Model X production should also be noted.

Production delays and the little mess with the supplier regarding the development of the falcon wing doors would have figured rather heavily into the company’s expenses. In Q4 the automaker posted over $320 million in losses, nearly triple the amount from the same period in 2014.

But with that out of the way, the production rate of the electric crossover should touch 1,000 units per week by the middle of the year and with the Model S close to 2,000 units can be made every week. Growth should already come earlier as roughly 16,000 vehicles are expected to be delivered in Q1.