Tesla Q3 2019: Profits and Progress to Autonomy

Tesla beat Wall Street’s expectations in 3Q 2019, and by some margin. After losing over US$1 billion during 1H 2019, it registered a profit of US$143 million in the third quarter. And while it will still end up in the red for the full year, Tesla’s increasing volumes is good news for the still-developing ecosystem for future autonomous vehicles.

Tesla is getting close to its annual delivery target of 360,000-400,000 vehicles. In Q3, its deliveries stood at 97,000, a significant improvement over the 63,000 with which it began the year. To meet its target, it will have to sell 105,000 cars in 4Q 2019. Taking a long-term view, it is important for Tesla to keep increasing volumes. More vehicles on the road mean more data for it to fine-tune its development of autonomous vehicles. The Model Y, an electric SUV which Elon Musk believes will outsell all of its other models, will only add more Teslas on roads in 2020.

Tesla is confident that its cars will be capable of carrying out most driving tasks under supervision by the end of this year. Subject to regulatory approvals, the company is also confident of offering cars with Level 4 autonomy within 2020. While there is debate over whether the company is overpromising, Counterpoint believes that even if the launch is delayed by a couple of years, Tesla will remain ahead of big automakers in the development of autonomous vehicles.

Exhibit 1: Tesla Cars Production and Deliveries in 2019

The company’s acquisitions during 3Q 2019 will also improve its machine learning algorithms. One of the companies Tesla acquired during the quarter is DeepScale, a 12 employee, four-year-old startup. Its Carver21 is an AI software for autonomous vehicles using deep neural networks. Carver21 only works with front cameras rather than LiDAR. Tesla is not a believer in LiDAR, reckoning that cameras and radar are enough and also considerably cheaper than LiDAR. This makes DeepScale’s technology a good fit.

In 3Q 2019, Tesla also acquired Hibar Systems, a high-speed battery manufacturing company, which will aid Tesla to develop in-house battery technology and further ease delivery bottlenecks. Batteries remain the most important component of electric vehicles. Tesla’s efforts to gain expertise in battery technology and manufacturing is positive for the future when it will need a mix of in-house technologies and partners for battery supply.

Envisioning a future where the human is freed of driving tasks, Tesla continues to improve its in-vehicle experience. The latest software update, 10.0, adds Spotify Premium, Netflix, YouTube, and Hulu. There’s also ‘Caraoke’, a feature that lets drivers and passengers sing karaoke on a road trip.

To sum up, Counterpoint’s believes that the big positive for Tesla is its ever-increasing volumes. Its goal of creating fully autonomous vehicles will be made all the more possible if it has a large network of cars actively generating training data that will be used to train autonomous driving algorithms.

As it has already shown in 3Q 2019, Tesla can manage to improve operational efficiencies and trim costs when required. Greater volumes will also help bring down product development costs. With the head-start it has now, it is difficult to argue against Tesla leading the race in autonomous vehicle development.

Counterpoint research is a young and fast growing research firm covering analysis of the tech industry. Coverage areas are connected devices, digital consumer goods, software & applications and other adjacent topics. We provide syndicated research reports as well as tailored. Our seminars and workshops for companies and institutions are popular and available on demand. Consulting and customized work on the above topics is provided for high precision projects.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited


In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.