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Tesla's still profitable, but big challenges await it in 2019

Tesla's Q4 earnings report shows that things are looking up for the EV maker, but 2019 will be a pivotal year.

Whose company was profitable for two quarters in a row? That's right. It's this guy.
Mark Schiefelbein / AFP/Getty Images

When Tesla posted its first quarterly profit in Q3 of 2018, the internet was more than a little shocked. Shorts wept, fanboys cheered and many wondered if the Big T could pull it off a second time. Well, the results are in as of Wednesday for Q4, and despite a few bumps, Tesla managed to do it again, albeit a little less successfully to the tune of $139 million.

Tesla's 2018 was incredibly rough for a variety of reasons, no small percentage of which were due to it shooting itself in the foot, but in the end, it was able to escape production hell and achieve the sustained high levels of Model 3 production that shareholders (and customers) demanded.

Of the many changes that Tesla has planned for 2019, the construction of a Chinese Gigafactory and the ability to sell the Model 3 both in China and in Europe in significant numbers should both lead to a reasonably rosy year for the American EV manufacturer. In fact, it plans on delivering between 360,000 and 400,000 vehicles for 2019. That's a 45-65 percent increase from 2018.

Couple that with the accelerated development of Tesla's forthcoming Model Y, which Tesla claims shares 75 percent of its components with Model 3, including its basic chassis design, and you've got significant room for the company to grow despite having a limited product line, two vehicles from which are getting pretty old (the Model S was introduced in 2012).

"Tesla's in an awkward purgatory between being a startup and a mainstream automaker, and the biggest open question heading into 2019 is where the company really goes from here," said Jessica Caldwell, executive director of industry analysis for Edmunds.com, in a statement. "Tesla is used to owning the spotlight, but for the next year we might see a lower-key Tesla as the company takes baby steps to keep things moving along while it plans for the future."

Another interesting factoid that we were able to dig out of the Q4 earnings report includes a statement that approximately 70 percent of all Model 3 buyers in the second half 2018 purchased their vehicles without having taken a test drive. That's especially crazy when you consider the price point that the Model 3 occupies.

Financial analysts raised some concern recently over March's looming $920 million bond repayment that, if Tesla's stock doesn't hit at least $359.87, the company will have to pay back in cash. However, Tesla's earnings statement addressed these concerns as well, asserting that it was in a stable enough position to be able to repay this bond if necessary.

Based on the information we're seeing in its earnings report, Tesla's future continues to look bright but with a massive new factory under construction and a new model on its way, there are bound to be some pitfalls and stumbling blocks for Mr. Musk to avoid along the way.