Tesla’s third-quarter shareholder letter was a mixed bag: profits are up, but mainly due to sales of California ZEV credits; Model S deliveries are right on track; and the Model X will be delayed once again.

Tesla reported a small third-quarter profit of $3 million, using non-GAAP figures, which include healthy sales of Zero Emission Vehicle credits, which totaled a “much higher than expected” $76 million. On a GAAP basis, the company posted a loss. However, analysts were expecting lower revenues, and TSLA stock rose a moderate amount after the announcement.

Tesla delivered 7,785 cars from July through September – its highest-ever quarterly sales, and a 40 percent increase from the same period of 2013 (so there, Wall Street Journal!). The figure was right in line with the company’s most recent guidance of 7,800 deliveries for the quarter. Tesla expects to deliver 33,000 Model S in 2014, and is “confident” that next year’s Model S production will increase 50 percent, and that it will be building “more than 2,000 vehicles per week” by the end of 2015.

We’ll have to wait a bit longer for the Model X to shake up the luxury SUV market:

Work continues on the finalization of Model X with the testing of Alpha prototypes and initial builds of the first Beta prototypes. Model X powertrain development is almost complete with the early introduction of Dual Motor drive on Model S.

We recently decided to build in significantly more validation testing time to achieve the best Model X possible. This will also allow for a more rapid production ramp compared to Model S in 2012.

In anticipation of this effort, we now expect Model X deliveries to start in Q3 of 2015, a few months later than previously expected. This also is a legitimate criticism of Tesla – we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term.

More: Elon Musk says the Model X is a harder design problem but worth the wait

Tesla noted that many other automakers “do not follow this philosophy [but] Tesla is not going to change.”

A couple of other things that aren’t going to change: “No advertising, no endorsements. We don’t pay anyone to pretend they like our products,” said Elon Musk in a conference call with analysts, explaining that customer demand is simply not a problem.

Nor does Tesla plan to start releasing monthly sales data as other automakers do. Monthly deliveries vary a lot by region, and Musk fears that the media would use those figures in a misleading way (and they would). For example, 1,000 might be delivered to a region in January and then 100 in February, and he doesn’t want to hear that “demand dropped 10 times.”

The Gigafactory is coming along, and Tesla now says that the first battery cells should roll off the line in two years, earlier than planned. As for battery breakthroughs, Musk said that the Gigafactory will use technology that has already been demonstrated in the lab (that actually covers quite a lot). While the company expects to cut battery costs substantially, most of that will come from economies of scale, not new technology, said Musk, although he did add that “if we can’t get technology improvements, someone should shoot us.”

Source: Tesla, Green Car Reports, Forbes
Images: Jurvetson/Flickr