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Tesla records fourth straight quarter of profits despite COVID-19

Tesla records fourth straight quarter of profits despite COVID-19
Tesla records fourth straight quarter of profits despite COVID-19

Tesla, the renowned US-based electric vehicle manufacturing company, recently released its second-quarter outcomes. Amid the economic crisis caused by the coronavirus, the company reported profits for the fourth straight quarter and its shares increased over 4% following the announcement.

This is how Tesla’s electric vehicle and renewable energy business performed against analysts’ estimates, as per Refinitiv.

  • Earnings: 3 cents per share (expected) vs. $2.18 (ex-items)
  • Revenue: $5.37 billion (expected) vs. $6.04 billion (actual revenue)
  • Net income: $104 million (GAAP)

The electric vehicle giant also announced its first full year of profitability on the GAAP basis, making it eligible to be included on the S&P 500 index.

During the release of profit reports, Elon Musk announced that the company would build a new manufacturing factory near Austin, Texas. The electric vehicle giant aims to completely dedicate its car plant in California for the manufacturing of Model X and Model S for global markets, while Model Y and Model 3 production would only focus on North America’s Western half.

Elon Musk further added the new Texas factory would be used to product Semi, Cybertruck, Model Y, and Model 3 vehicles for  North America’s Eastern half.

Automotive revenue dropped 4% YOY for the company, decreasing to $5.18 billion from $5.38 billion, even after the addition of a new crossover SUV, Model Y, to its lineup of vehicles as well as constructing its new plant in Shanghai in 2019.

The company reported $111.2 million in income through regulatory credits during the year-ago quarter. The company has seen a tremendous growth in that number, which has tripled nearly to $428 million, during the second quarter of 2020.

Tesla CFO, Zachary Kirkhorn stated that the company hopes its regulatory credit revenue would double in 2020 as compared to 2019, and to see continued growth for some uncertain amount of time. However, to get long term profitability, the company aims to decrease the vehicle manufacturing cost, and generate more money through the software over time.

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Omkar Patwardhan

Omkar Patwardhan started his professional career in the hospitality industry. Having nurtured a deep-sated passion for words however, he found his way into content writing and now pens down articles for and a few other websites, spanning the sectors of business, finance, and technology./