Elon Musk flipped the script on those who doubted Tesla could return to profitability and meet aggressive timelines, delivering positive earnings few saw coming and declaring he is ahead of schedule on a China plant and new product. The electric-car maker earned US$1.86 a share in the third quarter, exceeding the most optimistic projection by a wide margin and beating the consensus estimate for a 24-cent loss. On top of that, Musk peppered investors with positive updates: Tesla’s new factory in Shanghai is already starting production, the Model Y crossover will launch months earlier than expected next year and the long languishing energy business is showing signs of life. It all added up to a report that broke the mould for Musk, 48, who is notorious for setting stretch goals that take longer to pull off than he plans. Tesla still faces challenges: quarterly revenue fell for the first time since 2012, and the company has posted the occasional profit in the past that it has been unable to sustain. But after reporting reined-in expenses that padded gross profit margins, the shares climbed in pre-market trading to levels last seen almost eight months ago. “If you look at the margins and the profitability, that’s the major feather in the cap for the bulls,” Dan Ives, an analyst at Wedbush Securities, said on Bloomberg Television. “If they can maintain this, this could be a potential game changer for them going forward.” Tesla shares soared 17 per cent to US$299.68 on Thursday. The stock was down 23 per cent this year through Wednesday’s close. Failed Chinese entrepreneur Jia Yueting files for bankruptcy in US Trial output of the Model 3 is underway at the factory Tesla began building early this year on the outskirts of Shanghai. Producing the sedan locally enables Musk to charge less for the car by avoiding import duties. The factory “opens up a whole new market” for the company, said Gene Munster, a managing partner at venture capital firm Loup Ventures. Production and deliveries of the Model Y, which shares underpinnings with the Model 3, will start in the summer of next year, rather than the fall. Musk – never one to back down from outlandish predictions – said the crossover could outsell the Model S, X and 3 combined. The CEO was as candid as he is ever been about the extent to which Tesla is no longer focused on the high-priced Model S and X, both of which can sell for six figures, calling them “really niche products.” “To be totally frank, we’re continuing to make them more for sentimental reasons than anything else,” he said. “They’re only of minor importance to the future.” For all of Musk’s nonchalance, the pivot toward lower-priced cars at the expense of pricier models has been financially taxing. Revenue fell to US$6.3 billion in the third quarter, missing analysts’ estimates and dropping from US$6.8 billion a year ago. Musk has been charging customers for performance features that Tesla vehicles are not actually capable of yet. At the end of June, the company said it expected to recognise US$567 million of deferred revenue in the following 12 months. It is now anticipating the release of almost US$500 million tied to the roll-out of Autopilot and “Full Self Driving” features, according to the statement, which does not give a time frame. Tesla’s gross margin in the third quarter was 22.8 per cent, down from a year ago but a 3.9 percentage point improvement from the prior three months. For more insights into China tech, sign up for our tech newsletters , subscribe to our Inside China Tech podcast , and download the comprehensive 2019 China Internet Report . Also roam China Tech City , an award-winning interactive digital map at our sister site Abacus .