New Cars and Bikes in India

Tesla's Profit Sets Up S&P 500 Entry, While CEO Elon Musk Pushes For Growth

Tesla said it earned net income of $104 million from April to June, or $0.50 per share, marking the first time the company has posted a profit for four straight quarters, a condition for it to be considered for the stock index of the largest U.S. companies.

expand View Photos
Tesla also announced its plan to build a new Gigafactory in Texas to create at least 5,000 jobs

Tesla Inc on Wednesday posted a second-quarter profit as cost cuts and strong deliveries helped offset coronavirus-related factory shutdowns, sending its stock up 4.4% in after-hours trading and clearing a hurdle that could lead to the electric carmaker's inclusion in the S&P 500 index. Tesla said it earned net income of $104 million from April to June, or $0.50 per share, marking the first time the company has posted a profit for four straight quarters, a condition for it to be considered for the stock index of the largest U.S. companies.

The performance is a major accomplishment for Chief Executive Elon Musk, whose mission of leading the global auto industry into an electric future has frequently been questioned by investors who doubted Tesla's viability. Its shares have gained more than 500% over the past year. Many analysts believe the rally has been fueled in part by expectations of Tesla's imminent inclusion in the stock index, which would unleash a flood of demand for shares.

m582er2k

The price of a Model 3 sedan, its most popular vehicle, starts at $37,990 in the United States.

Musk on a conference call on Wednesday said Tesla would prioritize growth over profit going forward and focus on making its vehicles more affordable. "The thing that bugs me most right now is that our cars are not affordable enough, we need to fix that," Musk said on the call. "I think we just want to be like slightly profitable and maximize growth and make the cars as affordable as possible." The price of a Model 3 sedan, its most popular vehicle, starts at $37,990 in the United States.

Musk also announced that Travis County, Texas, which includes Austin, would be the site of Tesla's new factory. The area had been competing with Tulsa, Oklahoma, for the new plant, which promises to create at least 5,000 jobs. Musk said the factory would produce Model 3 and Model Y vehicles for the Eastern United States, as well as a new semi-truck called the Tesla Semi and the carmaker's futuristic Cybertruck.

8l5kv5ik

The Tesla Cybertruck will be manufactured at the company's upcoming Gigafactory in Austin, Texas

Tesla on Wednesday affirmed its goal to deliver at least half a million vehicles by the end of 2020 despite production interruptions, including the shutting of its California factory for nearly six weeks of the quarter on orders of local authorities. The company delivered more than 90,000 vehicles in the second quarter, surpassing analyst expectations. "While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target," the company said.

Musk said on Wednesday's call that the real limitation to Tesla's growth is battery cell production at an affordable price, and said the company would expand its business with Panasonic Corp and China's Contemporary Amperex Technology (CATL). Tesla will introduce new low-cost, long-life batteries in its Model 3 sedan in China later this year or early next, Reuters reported previously.

Tesla's second-quarter revenue fell to $6.04 billion from $6.35 billion a year earlier, but surpassed analyst expectations for revenue of $5.37 billion, according to IBES data from Refinitiv.

Tesla reported $5.18 billion in second-quarter automotive revenue, but its share of income from regulatory credits - payments the company receives from other carmakers to offset emissions - increased to $428 million from $354 million in the first quarter.

That revenue could dry up as more manufacturers develop and sell electric cars, but many rivals are still focused on reaping the high profit margins from fuel-guzzling trucks and SUVs.

"Right now in the EV market, it's Tesla's world and everyone else is paying rent, a dynamic shown front and center this quarter," Dan Ives, a Wedbush analyst, said in a note.

Tesla's rapid rise to become the world's most valuable carmaker could mark the start of a new era for the global auto industry, defined by a Silicon Valley approach to software that is overtaking old-school manufacturing know-how.

The company said higher income from those regulatory credits in combination with temporary employee salary cuts during the pandemic and $48 million in deferred revenue from its yet-to-be-released self-driving feature offset the cost of factory shutdowns.

Musk on Tuesday qualified for a payout worth an unprecedented $2.1 billion, his second jackpot since May from the electric car maker following its massive stock surge.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

0 Comments

For the latest auto news and reviews, follow carandbike.com on Twitter, Facebook, and subscribe to our YouTube channel.

You might be interested in

New Car Models

Toyota Urban Cruiser

SUV, 17.03 - 18.76 Kmpl
Toyota Urban Cruiser
Price Starts
₹ 8.4 - 11.3 Lakh
EMI Starts
₹ 17,437 9% / 5 yrs

Kia Sonet

SUV, 18.2 - 24.1 Kmpl
Kia Sonet
Price Starts
₹ 6.71 - 11.99 Lakh
EMI Starts
₹ 13,929 9% / 5 yrs

Audi RS Q8

SUV, 8.2 Kmpl
Audi RS Q8
Price Starts
₹ 2.07 Crore
EMI Starts
₹ 4,29,698 9% / 5 yrs

Honda Jazz

Hatchback, 17.1 - 18.2 Kmpl
Honda Jazz
Price Starts
₹ 7.5 - 9.74 Lakh
EMI Starts
₹ 15,567 9% / 5 yrs

Audi RS7 Sportback

Sedan, 11.6 Kmpl
Audi RS7 Sportback
Price Starts
₹ 1.94 Crore
EMI Starts
₹ 4,02,712 9% / 5 yrs

Honda City

Sedan, 17.8 - 24.1 Kmpl
Honda City
Price Starts
₹ 10.89 - 14.64 Lakh
EMI Starts
₹ 22,606 9% / 5 yrs

Hyundai Tucson

SUV, 12.95 - 16.38 Kmpl
Hyundai Tucson
Price Starts
₹ 22.3 - 27.03 Lakh
EMI Starts
₹ 46,291 9% / 5 yrs

MG Hector Plus

SUV, 13 - 17 Kmpl
MG Hector Plus
Price Starts
₹ 13.74 - 18.69 Lakh
EMI Starts
₹ 28,518 9% / 5 yrs
Be the first one to comment
Thanks for the comments.