Oct 24 (Reuters) - Tesla Inc made good on Chief Executive Officer Elon Musk's promise that it would turn a profit in the third quarter as it ramps up production of its Model 3 sedan, sending its shares up 7 percent in after-market trade.
The Silicon Valley electric carmaker said on Wednesday that it made a net profit of $311.5 million in the quarter and had free cash flow of $881 million.
Musk had said in May that Tesla would be profitable in both the third and fourth quarters and as a result would not need to raise new capital from financial backers.
A surge of production in the quarter helped. Tesla said it produced 5,300 Model 3s in the last week of the third quarter.
Tesla said earlier this month it built 53,239 Model 3 sedans in the quarter, in line with its target of 50,000-55,000 vehicles, and delivered 55,840 of the cars to customers.
Musk is under intense pressure to prove he can deliver consistent production numbers for the Model 3, seen as crucial to Tesla's profitability and its ability to be a mass market car producer.
More sales of the higher-priced versions of the Model 3, which carry fatter margins, will help profitability. Tesla said Model 3 gross margin was more than 20 percent in the reported quarter.
Tesla reported a profit of $311.5 million, or $1.75 per share, for the third quarter ended Sept. 30, compared with a loss of $619.4 million, or $3.70 per share, a year earlier.
Excluding items, Tesla had a profit of $2.90 per share.
(Reporting by Alexandria Sage and Sonam Rai; Editing by Bernard Orr)