With an international pandemic raging at the tail end of Q1, everything in the automotive sector was doom and gloom. Sales were down across the board from nearly every automaker in nearly every market. America’s leading electric car company bucked that trend, however, not only delivering more cars in Q1 2020 than it had across the same period in 2019, but also turning a $16 million profit in the process from $5.985 billion in revenue.
In spite of the fact that the company figurehead is a megalomaniacal dingus with an overactive Twitter account, Tesla managed a relatively impressive Q1 with results buoyed by a reduction in operating expenses, an increase in deliveries, and a huge spike in sales of emissions exemption credits to other automakers.
Q4 of 2019 was good to Tesla, as it was also the first full quarter of operation at its Shanghai factory. Obviously the covid-19 pandemic threw a wrench in the works by February as demand dropped off and international supply chains were severed. The company still managed to push out a profit, in part because it kept the doors to its factory open even after government mandates to close them, pushing its new Model Y deliveries beginning in mid-March. This marked Tesla’s third straight quarter of profitability.
Tesla has long turned its regulatory credits into a financial boon, but as new European emissions regulations come into play, its credits are even more important for other companies—like Daimler and FCA—to grab up. Tesla’s ZEV credit program has brought the company over $2 billion in revenue since 2010 when it started selling those credits to automakers to offset sales of polluting vehicles. While that number hovered around the $100 million mark per quarter across 2019, Tesla sold a whopping $354 million in credits in Q1 2020.
Earning $16 million from a revenue of nearly $6 billion is a narrow profit, to say the least, but it’s a profit all the same. Across the same period in 2019, Tesla saw a $702 million loss.
In spite of a new stay-at-home order extension through the end of May affecting Tesla’s Fremont, Calif. factory, the company says it is still on track to deliver on its goal of 500,000 units this year. The Fremont factory was planning to re-open on Monday, May 4th, but this new mandate curtails any such plan. Meanwhile, Nevada Governor Sisolak has announced a plan to extend the state’s shelter-in-place mandate, which will also keep Tesla’s Gigafactory battery plant closed.
Tesla delivered 88,400 vehicles in Q1 and produced 103,000. In order to meet that 500,000 unit number, the company is going to have to get back to work quickly and hope that demand for its expensive electric cars doesn’t wane in the face of a potential international economic meltdown.
Perhaps that’s what caused Elon Musk to tweet this asinine three-word screed to his millions of followers.
Also in Wednesday’s Q1 earnings event, Tesla announced it would be delaying its Semi truck release until 2021. The truck was first shown in November of 2017. Hell, the Roadster wasn’t even mentioned.
The profit announcement caused Tesla’s shares to gain nearly 100 points on Wednesday, which plays nicely into Elon’s big payday plans.
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