Musk’s Tesla Turnaround

Today Elon Musk had some good news to report about Tesla for a change. The electric vehicle maker’s third-quarter results on Wednesday were the strongest in 12 months, with a return to growth in auto revenues after two quarters of decline and the revelation that the Cybertruck had turned profitable. Tesla even projected it would finish this year with “slight growth” in vehicle deliveries, which implies sales growth accelerates in the fourth quarter.

Tesla achieved the growth turnaround even while improving its margins, presumably a result of its layoffs earlier this year. As a result, Tesla generated more free cash flow in the quarter—arguably the most important metric of profitability, as it measures actual cash generated after taking capital expenditure into account—than it had in the previous seven. Investors were, predictably, jubilant. Tesla stock jumped around 12% in after-hours trading to near $240, making back all the ground lost after Musk’s disappointing Cybercab event two weeks