During an all hands meeting back in August at Tesla’s Fremont factory, one thing that was stressed by Tesla CEO, Elon Musk, more than anything else was that Q3 of 2016 is going to be the “quarter of reckoning”, as this was the only quarter that profitability can be achieved until late next year. We now have the delivery numbers for Q3, a record-breaking 24,500 deliveries with 5,500 in transit (5,500 will count toward Q4 delivery numbers). Although the official earnings report is not out yet, these numbers are a strong indication that the third quarter was for the first time a profitable one for Tesla.

Ever since it’s inception, Tesla has been a victim of continuous propagandistic criticism. It started with questioning it’s viability as an electric car at a technological level, then they won Motor Trend Car of the Year (the first electric car to do so) for the first time in 2012. Once that happened the mainstream press moved their narrative from technological viability to “well, they can build an electric car, but they can’t produce it in volume”. In 2013 Tesla had its first full year of volume production, producing over 22,000 vehicles. Since then production has grown and this year ~80,000 cars are expected to be delivered. So what point of criticism is left to attack Tesla now? Profitability. There has been an endless number of articles regurgitating the fact that Tesla can never be profitable.

These news publications don’t seem to see the pattern. When Q3 earnings report is released (no date has been provided for the release) the pattern will continue and the doubters will be once again proven wrong. So what’s so special about this quarter that allows for profitability? It’s the eye of the storm. Up until now Tesla has been spending heavily on the gigafactory and Model X production ramp up among other general capital expenditures. Starting in Q4 all the way up to Q3 of 2017 there will be heavy spending for Model 3 production. This quarter is right in the middle of the two periods of heavy Capex spending and although it will be very thin margins, profitability seems to have been achieved. As of now it isn’t official yet until Q3 earnings report is released, but we do have the official delivery numbers which show that profitability is almost but certain.

Disclaimer: I am a Tesla employee and shareholder. Everything I write is my own personal views and do not represent the views of the company.