Shares in electric car maker Tesla leapt in after-market trades following the company’s quarterly earnings report (SAUL LOEB)

San Francisco (AFP) – Electric car maker Tesla on Wednesday reported a “historic” profitable quarter driven by demand for its Model 3 aimed at the mass market.

Tesla said net income reached $311.5 million on revenue that more than doubled to $6.8 billion in the quarter that ended September 30.

Shares in the company leapt 12 percent to $323.25 in after-market trades that followed release of the earnings figures for its fiscal third quarter.

For the same period a year ago the company reported a loss of $619 million.

“Q3 2018 was a truly historic quarter for Tesla,” co-founder and chief executive Elon Musk said in a letter to shareholders.

“Model 3 was the best-selling car in the US in terms of revenue and the 5th best-selling car in terms of volume.”

Tesla’s assembly line produced an average of 4,300 cars weekly in the quarter, nearing a goal set a while back by Musk.

Tesla has also improved efficiency, ramping up the gross margin on Model 3 vehicles to more than 20 percent, according to Musk.

He expressed confidence that Tesla would be profitable again in the current quarter, despite using cash to pay off notes.

“Model 3 is attracting customers of both premium and non-premium brands, making it a truly mainstream product,” Musk said, adding that the company’s “earnings profile has flipped dramatically.”

Tesla shares got a boost earlier this week when a high-profile stock short-seller shifted gears to say the electric car maker is “destroying the competition.”

In a complete U-turn, Citron Research released a note to investors outlining reasons it thought the smart move is to be “long” and own Tesla shares.

“Tesla appears to be the only company that can actually produce and sell electric cars,” the note said.

Acknowledging its dramatic change of course, Citron Research wrote that following significant analysis, it believes the affordable Tesla Model 3 is a hit and is not concerned by previous warning signs.

Tesla is at something of a turning point. 

It has been accelerating production of its Model 3, the mass-market vehicle with a potential to disrupt the entire automotive sector — yet the company remains burdened by billions in debt.

“Rumors of the Tesla killers have been as constant and unfounded as Bob Lutz’s call for Tesla’s bankruptcy,” said Citron Research, founded by activist short-seller Andrew Left.

“While the media has been focused on Elon Musk’s eccentric, outlandish and at times offensive behavior, it has failed to notice the legitimate disruption of the auto industry that is currently being dominated by Tesla.”

Tesla co-founder and chief executive Musk has lashed out on Twitter at short-sellers, earlier this year sending “short shorts” to one such investor betting on shares in the company dropping.

Musk even tweeted that short shorts would be added to a line of merchandise sold by Tesla.

Short-sellers are investors who bet that shares will fall and are frequently the subject of Musk’s derision.

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