Tesla posts record third straight quarterly profit despite Covid-19 headwinds

Tesla has posted a profit for its third straight quarter, despite the huge disruption faced by the global auto industry throughout March as the coronavirus crisis escalated. The company yesterday confirmed it had beat many analysts' expectations to post $16m of profit after expenditure during the first three months of 2020.

The results represent the best first quarter results in its history for both production and deliveries, despite the impact of lockdowns in many of its main markets.

Even with production interruptions, which saw the firm forced to suspend its manufacturing operations in California due to the Covid-19 outbreak, Tesla maintained it had the capacity to build 500,000 electric vehicles (EVs) this year.

"Despite global operational challenges, we were able to achieve our best first quarter for both production and deliveries," the company said in its quarterly financial results briefing. "We believe we are well positioned to manage near-term uncertainty while achieving our long-term plans."

Tesla's revenue rose to almost $6bn during the first quarter of 2020, an increase from the $4.54bn it achieved during the same period last year, as the company continued to ramp up production of its EVs worldwide.

Analyst Refinitiv had expected Tesla's revenue to hit around $5.9bn during the first quarter of 2020.

The results surprised many analysts' predictions, given the scale of the challenges facing the global car industry as a result of the Covid-19 pandemic, which has hit both production and consumer demand for cars around the world in recent months.

Earlier this month, market analyst Wood Mackenzie said that after yet another record year for global electric car sales in 2019, it expected sales to plummet 43 per cent this year due to low oil prices, supply chain delays, and consumers putting off new purchases.

Meanwhile, sales of all cars - including electric, hybrid, petrol and diesel - are expected to drop 22 per cent worldwide this year, according to HIS Markit, while in the UK alone all car sales have plummeted 44 per cent since the outbreak hit.

But while Tesla conceded it was facing challenges to its business from the pandemic and was now pushing the first deliveries of its electric truck - the Tesla Semi - from this year into next, it remained broadly bullish regarding its ability to weather current headwinds and increase production worldwide in 2020.

Elsewhere in its financial update, the company said deliveries of its new Model Y electric car had started "significantly ahead of schedule" this year, and that it expected the lower-priced SUV to become its best-selling vehicle in the near future. The Model Y achieved a profit during the first three months of the year, marking the first time a new Tesla EV model has achieved such a feat during its first quarter of production.

There were also positives in Tesla's solar panel business, where it for the first time reached production of 1,000 solar roofs in a single week during the first quarter.

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• Topics
• Automotive
• Tesla
• Electric Vehicles
• Coronavirus