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Elon Musk hints at Tesla’s profitable Q4, Mid Range Model 3’s int’l release

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Tesla stock (NASDAQ:TSLA) is down on early Friday trading amidst news of the company’s new round of layoffs, as well as the impending production ramp of the $35,000 Standard Range Model 3. The rationale behind the 7% job cuts was extensively explained by Elon Musk in an email to Tesla employees, which was shared on the company’s blog.

Musk acknowledged the challenges that Tesla is currently facing, particularly as the company is now setting the stage for the impending release of the Model 3’s most aggressively-priced variant. In his message, Musk noted that in the near future, Tesla’s challenge would lie in developing vehicles and energy products that are attainable for mainstream customers.

“Looking ahead at our mission of accelerating the advent of sustainable transport and energy, which is important for all life on Earth, we face an extremely difficult challenge: making our cars, batteries and solar products cost-competitive with fossil fuels. While we have made great progress, our products are still too expensive for most people,” Musk wrote.

Perhaps most notable in the letter, though, is Musk’s discussion about Tesla’s capability to make a profit. The Tesla CEO noted that he considers Q3 2018’s 4% profit to be the most meaningful in the company’s 15 years of existence. Musk pointed out, though, that the third quarter’s profit was partly the result of a strong push to sell higher-priced variants of the vehicle — the Long Range Model 3 AWD and the Model 3 Performance — to customers in North America. As for Q4 2018, Musk stated that there is a good chance Tesla would be able to make a profit as well, though not in the same level as the third quarter.

“In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3,” Musk wrote.

To help the company maintain profitability, Tesla is adopting Q3 2018’s strategy this quarter, with the electric car maker pushing the Model 3 Performance and the Long Range Model 3 AWD to customers in Europe and China. Musk also stated that Tesla is aiming to deliver “at least the Mid Range Model 3 variant in all markets” starting around May, in order to reach a greater demographic for the electric sedan. Such a system would likely serve Tesla well, at least until the company could start producing the Standard Range Model 3, which starts at the ever-elusive price of $35,000.

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In a statement to CNBC, Wedbush analyst Dan Ives notes that Tesla’s international Model 3 push would likely determine the company’s success in the first half of 2019. In the second half, though, Ives stated that Tesla would need to start producing more affordable versions of the electric sedan for the international market.

“If you think about the trajectory, the first half of 2019 is really Europe coming onboard. But then, ultimately, in the second half, you need the mid-range Model 3 to really start to kick in,” he said.

Tesla’s Model 3 ramp might have already reached a level where the company is able to distribute the vehicle to other countries, but the electric car maker is only about halfway done. Tesla eventually aims to produce 10,000 Model 3 per week, to meet the expected demand for the vehicle in the international market. To accomplish this, Tesla continues to optimize its production capabilities in Fremont, while accelerating the construction of Gigafactory 3 in China. The latter is expected to complete initial construction by the end of summer, with the facility manufacturing the first China-made, “affordable” Model 3 by the end of the year.

Elon Musk’s recent letter to Tesla employees can be accessed here.

As of writing, Tesla stock is trading down 8.78% at $316.81 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

SpaceX turned a heralding moment for Starship into its greatest

Starship reached orbit despite losing an engine, deployed 26 Starlink V3 satellites on Flight 14.

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SpaceX’s Starship reached orbit for the first time on Monday, and for a few nail-biting minutes it looked like it wouldn’t. During ascent on Flight 14, one of Ship 41’s six Raptor engines shut down early, and SpaceX’s livestream host Dan Huot told viewers the team had decided not to commit to orbit. Minutes later, after what Huot described as a lot of conversation in the control room, the final poll came back in favor, and a roughly 19 second burn of a single Raptor pushed the ship into orbit about 170 miles up.

The reversal matters because SpaceX had written the exit ramp into the mission plan. The company said it would only fire the orbital insertion burn if flight controllers confirmed enough backup hardware remained for the deorbit burn, a condition Teslarati laid out ahead of the flight. Losing an engine was exactly the scenario that rule was built for.

Pressing forward fits Elon Musk’s history. Falcon 1 failed three straight times before its fourth launch reached orbit in 2008, with SpaceX nearly out of money, and Starship was developed by flying prototypes until they broke. What changed this year SpaceX going public, and with $SPCX sliding below its IPO price in July when Flight 13 slipped, the short interest climbed significantly, as Teslarati reported at the time. A Starship potentially lost today with revenue generating next-gen Starlink satellites aboard would have landed directly on shareholders.

That pressure showed up after orbit. SpaceX cut a flight planned to last nearly 10 hours to about three, moving splashdown from west of Chile to the North Pacific near Hawaii. SpaceX gave no reason, though Musk said this month the company was being extremely cautious about debris risk. The single Raptor for deorbit worked, and Ship 41 completed its flip and landing burn before breaking apart in the water, an outcome SpaceX expected. Musk has structured SpaceX’s governance to shield long term bets from market pressure.

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The payload is the bigger business story. Musk posted that all 26 Starlink V3 satellites deployed and are “operating nominally.” Each V3 is rated for about 1 Tbps of downlink and 160 Gbps of uplink, so this single launch adds roughly 26 Tbps, about 10 times what a Falcon 9 load of V2 Mini satellites adds. The V3 is too large for Falcon 9, making Starship the only vehicle that can build out the planned 100,000 satellite constellation, at up to 60 per flight once it reaches routine service. Unlike the 20 V3 units on Flight 13, which reentered on a suborbital path, these will raise their orbits and could begin serving customers within weeks and bring in hundreds of millions of additional dollars in projected Starlink revenue.

SpaceX has already begun winding down Falcon 9 Starlink launches from Florida in favor of Starship. Reported targets put Flight 15 as early as October 19, leaving about three weeks to diagnose Monday’s engine shutdown before the next orbital attempt.

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Elon Musk

SpaceX just got the green light Starship has waited years for

The FAA has cleared Starship Flight 14, setting up SpaceX’s first orbital attempt on Monday.

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SpaceX has cleared the last regulatory hurdle standing between Starship and its first trip to orbit. The Federal Aviation Administration issued the launch license for Starship Flight 14 late Saturday, keeping the mission on track for liftoff Monday, September 28, from Pad 2 at Starbase, Texas.

The 75 minute launch window opens at 7:15 a.m. Central, and Boca Chica Beach closures are also scheduled for September 29 and 30 as backup dates. This will be Starship’s first revenue generating mission.

The license was the missing piece after SpaceX completed a full wet dress rehearsal with Booster 21 and Ship 41 on September 24. At the time, the company said the flight remained on track pending regulatory approval. Because Flight 14 flies an orbital profile, the FAA had to sign off on a modified license that met its safety, payload and financial responsibility requirements.

Observers combing through the new FAA paperwork also noticed that lightning no longer appears among Starship’s listed launch hazards. If that holds, it matters more for where Starship is headed than for Monday’s attempt. Florida and Louisiana, home to LC-39A and the planned Starbase Louisiana site, see some of the most frequent lightning in the United States.

SpaceX tells the FCC that Starship Flight 14 is going to orbit

Flight 14 is the mission SpaceX has been building toward for months. Ship 41 will carry 26 Starlink V3 satellites, the first operational V3 units to be deployed, and attempt roughly six orbits at about 275 kilometers over a flight lasting just under 10 hours. SpaceX says the ship will only perform its orbital insertion burn after flight controllers confirm enough hardware redundancy remains for the deorbit burn at the end of the mission. Ship 41 is targeting a splashdown in the Pacific west of Chile, while Super Heavy will return to the Gulf of Mexico.

The date carries some symbolism as well. A Monday launch would come 10 years and one day after Elon Musk first presented the Interplanetary Transport System, the design that became Starship, at the International Astronautical Congress in Guadalajara, Mexico.

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SpaceX has not announced what comes next, but air traffic planning slides reported this week, list Flight 15 no earlier than October 19 and a first Starship launch from LC-39A in Florida no earlier than October 30. Both dates depend on how Monday goes.

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Investor's Corner

Tesla Optimus Gen 3 shows off a cleaner, factory-ready design in new app discovery

Renders hidden inside Tesla’s Android app show Optimus Gen 3’s design before any official reveal.

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Tesla Optimus Gen 3 [Credit: Tesla]

Tesla may have accidentally given a first look at its newest Optimus Gen 3 humanoid robot when photos were found in the Tesla smartphone app.

Design files tucked inside a recent Android version of the Tesla app appear to show the third generation humanoid robot next to the older Gen 2.5 prototype. The assets were extracted from the app package by Tesla community member @wholemars, who posted the renders on X late Tuesday night before deleting them. The Tesla Newswire reshared the side by side comparison on Wednesday, and the images have circulated widely since.

Tesla Optimus Gen 2.5 vs Gen 3 comparison via @WholeMars on X

Tesla Optimus Gen 2.5 vs Gen 3 comparison via @WholeMars on X

The files are labeled “gen3” and were built as models for Tesla app’s own interface, as validated directly by Grok to be official.

The comparison shows a robot that looks built for a factory line rather than a lab bench. Gen 2.5’s exposed mechanical linkages and gold plating on the knees and shins are gone. In their place, Gen 3 uses matte black fairings on the lower legs, paired with a more contoured champagne gold body. Flexible covers now seal the joint where the torso meets the upper thighs, keeping bearings and moving parts sealed from debris and unnecessary contact.

The body panels fit more tightly, and the hands, which Tesla has said carry 22 degrees of freedom, look far more refined than those on earlier units.

This most recent leak fills a gap Tesla has left open for most of the year. Elon Musk said on March 31 that Optimus 3 was walking around but needed “some finishing touches” before it could be shown, a delay Teslarati covered when Tesla missed its first quarter reveal target. Musk later said Tesla would hold the design back until closer to production, partly to keep competitors from copying it. No reveal date has been announced.

The app itself has been preparing for Optimus for months. In July, code in the Tesla app pointed to a dedicated robot phone key, a consent screen for collecting video and spatial data while Optimus works inside a home, and an alert system for low battery and mechanical faults. Finished 3D models of Gen 3 suggest the interface owners will eventually use is moving past placeholder code toward something Tesla intends to ship.

Manufacturing is moving in parallel. Tesla tore out the original Model S and Model X lines at Fremont this summer to make room for Optimus production, with a planned capacity of one million robots a year. At Giga Texas, the steel frame of a dedicated Optimus factory is nearing completion ahead of a targeted 2027 start, with Musk pointing to an eventual output of 10 million units annually.

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