The Palo Alto, Calif., company reported its first profit after 12 quarterly losses amid a push to generate cash for building its $35,000 Model 3.
The company has pledged to lift annual production to 500,000 cars in 2018, from about 50,000 last year.
The quarter’s profit—a record and only the second time ever—was driven higher by improved sales of the Model S sedan and Model X sport-utility vehicle, a reduction in spending and a boost from selling pollution tax credits to other auto makers.
Gross profit from the credits soared to $139 million from $39 million a year ago—above UBS analyst Colin Langan’s estimate for $30 million during the quarter.
The company in the current quarter may be profitable on an adjusted basis and maybe without adjustments, he said.