Tesla, the company known for its advanced electric cars, recently announced its fourth consecutive quarterly profit. The company continued to make profits despite the economic disruption caused by the coronavirus pandemic.
Tesla raked in $104 million from March to June, which means the company’s shares are growing and are set to see a surge in demand from other investors.
The stocks surged within hours of the quarterly results, announced by the company. This wouldn’t have been sweeping the headlines if it wasn’t for the economic turbulence caused by the coronavirus. So how did Tesla pull it off?
Cost Cutting At Employee level
The company confirmed that profits were mainly helped by the pay cuts of the employees as well as a new plant in China where the production cost is much lower.
Elon Musk stated that Tesla is a growth-oriented firm and is working on other factories including one in Germany and another one in Austin, Texas. He also said that he’s very optimistic about the company’s future.
Always Ahead Of Competition
While the pandemic forced the shutdown of production in Tesla’s main California-based plant until mid-May, it still managed to exceed expectations of the analysts.
The firm managed to make 82,272 cars and deliver 90,650, which was a 5% percent decline in the production as well as the revenue. However, it was still way ahead of rivals like General Motors and others that have reported huge sales decline during the same time. Tesla is also expected to produce another 500,000 cars in 2020.
“We have the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions,” Tesla said. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target.”
World’s Most Valuable Car Maker
Tesla has seen an unprecedented surge in its stocks since the beginning of 2020. The stock prices have gone for $430 to $1,550 in a matter of a few months.
While many critics believe Tesla has been overvalued, the company continues to dominate the market. The firm also dethroned Toyota to become the world’s most valuable carmaker, with a market worth close to $300 billion. This was despite Toyota selling almost 30 times more cars than Tesla in 2019.
Tesla has had a fair share of ups and downs since its inception. In its initial years, the company posted losses but after posting profits for the past four quarters consecutively, it might be included in the S&P 500 after approval from the committee that governs the index.
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