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Despite Difficulties, Tesla Delivers Its Fourth Consecutive Quarterly Profit

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Despite Difficulties, Tesla Delivers Its Fourth Consecutive Quarterly Profit

Despite being forced to shut down its California factory for about seven weeks due to the pandemic, Tesla, Inc. (NASDAQ: TSLA) managed to deliver a profit of $104 million in the second quarter of 2020. Now, with four profitable quarters in a row, the EV pioneer may finally be admitted to the S&P 500 club.

Q2 profitability despite COVID-19

Tesla pulled off the quarterly profit by selling 90,650 vehicles during the quarter. This is an increase from 88,000 cars from the first quarter. An impressive feat when taking into account the California factory shutdown. Nevertheless, second-quarter sales were still below the record 112,000 it achieved in the last quarter of 2019.

This past quarter's vehicle sales brought in a revenue of $6 billion, lifted by $370 million in energy storage sales, and $487 million in other services.

The profits didn't come easy. Tesla CEO Elon Musk fought a very public battle with local officials over the mandatory shutdown order during the pandemic. He ended up reopening the Fremont factory, violating their authority shortly before official reopening.

Still, the fact that Tesla finished the first quarter of 2020 with $8.1 billion in cash. This is the highest cash reserve it had throughout its history. It was perfect timing as it bought Tesla some stability during one of the most severe crises of modern time.

The company's overall resilience is quite a contrast when compared to its rivals, traditional automakers. Many have reported sales declines of more than 30%, which is still in line with grim Q2 auto sales forecasts from Edmunds and TrueCar's ALG.

Although General Motors Company (NYS GM) was focused on fortifying its balance sheet after the 2008 recession, it still saw its sales drop 34% during the second quarter. Ford Motor Company (NYSE: F) sales fell by 33.3% in that same period whereas Fiat Chrysler Automobiles (NYSE: FCAU) sustained a 38.6% drop.

New factory in Austin, Texas

Besides its results, Tesla's earnings call also saw Musk announced a site for its next US Gigafactory. Tesla is on track to receive several tax-incentive packages from local authorities as Austin, Texas to house its new factory, which he describes as an "ecological paradise" and will produce the company's Cybertruck and more Model Y SUVs.

As an added treat for Tesla's fans, the factory will be also open to the public.

Outlook

Looking to the remainder of the year, the company has not withdrawn its estimate that Tesla will deliver 500,000 vehicles by the end of 2020. According to the call, Tesla is installing additional machinery at the Fremont Factory that will increase the total Model 3 and Model Y capacity from 400,000 to 500,000 units per year.

If Tesla, and California at large, can keep COVID-19 infections from again reaching crisis levels and it doesn't have to deal with any further shutdowns, the company could reach its lofty goal and deliver a surprise second half of 2020. But considering the dynamics of the current pandemic, neither of the two are a given.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

The post Success Didn't Come Easy But Tesla Delivered Its Fourth Consecutive Quarter Profit appeared first on IAM Newswire.

 

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