Highflying Tesla logs surprise profit in Q2
US-BASED electric vehicle manufacturer Tesla Inc reported a surprise second-quarter profit on Wednesday.
This comes as it confirmed ambitious targets for 2020 car deliveries despite the coronavirus pandemic and announced plans for a new auto factory in Texas.
The result clears the way for the highflying company led by Elon Musk to potentially join the S&P 500. A requirement for the prestigious Wall Street index is four successive profitable quarters, which Tesla has now achieved.
Tesla shares – which have exploded this year as the company has met key targets – climbed further following the results. Several analysts that have praised Tesla’s accomplishments view the rise in valuation as excessive.
Musk praised Tesla’s staff for “exceptional execution” during a period that included the weeks-long closure of its California plant due to the coronavirus pandemic and said he looked forward to “continue scaling” Tesla up to enable production levels closer to that of conventional auto giants.
“I’ve never been more optimistic or excited about the future of Tesla,” Musk said on a conference call with analysts and investors.
Musk, who has long flouted the unwritten rules of buttondown CEOs, avoided the sort of fights with analysts that have occasionally surfaced on conference calls.
But he maintained an informal air throughout the 60minute session, saying he was interested in hiring “revolutionary actuaries” for an insurance project being developed and effusing about a new factory as an “ecological paradise”.
The electric car maker scored profits of $104 million in the quarter ending on June 30 compared with a loss of $408 million in the year-ago period.
Revenues fell five per cent to $6 billion.
Tesla said it was on track to ramp up production at factories in California and Shanghai and that activity on a plant being built in Germany “continues to progress”.
The company said delivering 500,000 autos this year “remains our target”, effectively reinstating its forecast after withdrawing the figure this spring amid the peak of US coronavirus shutdowns.
Musk said the company had picked a 2,000-acre (809.4ha) site near Austin, Texas for its next “Gigafactory” to build a number of models, including the new “Cybertruck” vehicle.
The announcement was greeted by Texas Governor Greg Abbott, who hailed Tesla as “one of the most exciting and innovative companies in the world” and said the factory would add “at least” 5,000 new jobs.