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Tesla’s UK profit more than doubles despite drop in deliveries

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Tesla Inc CEO Elon Musk dances onstage during a delivery event for Tesla China-made Model 3 cars in Shanghai on 7 January. Photo: Aly Song/Reuters

Tesla’s (TSLA) profit and revenue surged in the UK market in 2018, according to filings released today. The electric-car company’s revenue grew by 30% in 2018 from the year before, to just over £312m ($409m).

Profit increased from £809,000 in 2017 to £2.29m in 2018, although its gross profit margin contracted to 16.6% compared with 23.9% the previous year.

Tesla delivered fewer vehicles in 2018 versus the previous year, coming in at 3,516 units compared with 4,485 in 2017. The company did not respond to a request for clarification on why it experienced a delivery drop of nearly 1,000 vehicles.

Tesla shares soared on Friday, after it said it delivered 367,500 in 2019, a 50% increase from the year before and a record for the company, which has battled endless production problems since it began. Tesla’s market cap, at about $80bn, is now double that of US carmaker Ford.

Elon Musk’s celebrations continued this week as he danced on to a stage in Shanghai to celebrate first Model 3 rolling off the production line at the company’s new China plant, which is Tesla’s first gigafactory outside the US.

Tesla share price on Monday 7 January. Photo: Yahoo Finance chart

However, the electric car pioneer is going large in China at a time when the country’s economy is cooling and the automotive market with it. Beijing is in the process of ending attractive subsidies for electric cars as well, which caused more than 40% drop in electric vehicle sales in China in November.

Tesla is moving ahead with plans to break ground on its first European gigafactory this year, having last week submitted its official application to build the plant on a site outside the German capital Berlin. Application documents showed that Musk is aiming for a production volume of up to 500,000 vehicles a year from the German plant, beginning with Model 3 and Model Y cars.

READ MORE: Tesla plans to produce 500,000 cars a year in Germany