Between June and September 2019, Tesla delivered 97,000 electric vehicles to customers. That's a new record for the decade-old carmaker and a strong performance for its Model 3 sedan; around 6,000 cars per week found new homes during the quarter. But sales of the higher-margin Models S and X have dropped precipitously this year, and ever since the early October deliveries news, speculation has been rampant as to what that means for the company's bottom line.

Now we have that answer. On Wednesday afternoon, Tesla announced that it made a profit of $143 million during the third quarter of 2019. The other headline figures from Q3 2019 are that, at the end of September, the company had $5.3 billion in cash and cash equivalents and $371 million in operating cash.

For comparison, Tesla lost $408 million in Q2 2019, which followed even heavier losses in Q1 2019. In a presentation to investors ahead of a conference call this afternoon, Tesla stated that this newfound profitability "was possible by removing substantial cost from our business." Despite the fact that average sale prices have decreased (as consumers buy many more, cheaper Model 3 variants and many fewer Model 3 Performance or Models S or X), Tesla says its automotive gross margin is now 22.8%. That's higher than it's been previously in 2019.

The Shanghai Gigafactory is ready

Additionally, Tesla has kept to its promise to get its Chinese operation ready for production before year's end. Tesla says that it was built for 65% less per unit of capacity than the "US Model 3 production system." Originally, head honcho Elon Musk had touted an "alien dreadnought" that would move faster than they eye could see, but that ended up mired in "production hell" instead.

Tesla says that the Shanghai Gigafactory is producing test vehicles already and that it is in the process of getting the various necessary licenses and approvals from the Chinese government before it can begin producing Model 3s en masse.

Tesla's factory in Fremont, California, is currently receiving its Model Y production equipment. Tesla says it has learned from its experience in Shanghai and that capital expenditure spending should be 50% lower per Model Y than was the case for US-built Model 3s. Tesla has increased its capex spending for Q3 (from $250 million to $385 million), but levels are still far below where they were in Q3 2018. (The Chinese Gigafactory was financed with Chinese debt.)

In past quarters, emissions credits have often played a significant role when Tesla has made a profit. As we reported recently, Fiat Chrysler Automobiles and Tesla have entered into a partnership that will allow FCA to count Tesla's EVs as its own for next year's punitive European Union carbon emissions regulations. However, we'll have to wait for the release of Tesla's 10-Q document in the coming weeks to determine what FCA's contribution has been to this set of results.

Similarly, although Tesla says that it has recognized some of the revenue related to Smart Summon, it does not elaborate on exactly how much this or "other non-recurring items" actually contributed to the bottom line. That will have to wait for the 10-Q as well.