Tesla reports $312m profit in third quarter

is reporting that the

Model 3

has gross margins of over 20 percent, which has in part driven Tesla into profitability.

Ahead of the earnings webcast, Tesla released a shareholder letter detailing its third quarter results. According to the letter, Tesla has finally turned a profit – and a sizable one. The letter reports GAAP net income of $312m, driven by strong Model 3 sales. The news has sent Tesla stock soaring in after hours trading, running about 9 percent up at the time of this writing.

Tesla does acknowledge there were issues along the way to profitability – high scrap rates, logistical challenges, production ramp-up – and more importantly, and SEC investigation and eventual settlement based on

Elon Musk’s

questionable announcement on taking Tesla private via Twitter. But at the end of the day, Tesla says it delivered 56,065 Model 3s and 27,710 other models to customers in

Q3

. And its solar business is up, the company says, by 7 percent this quarter and 26 percent year over year.