For the first time, Tesla made a profit for four consecutive quarters. On July 22nd, local time, Tesla reported a net profit of $104 million for the first time in four consecutive quarters, meaning that the barriers to its stock being included in the Standard and Poor’s 500 index have been removed. In the second quarter, Tesla reported revenue of $6.04 billion, compared with $6.35 billion a year earlier, down 4.9 percent from a year earlier and beating analysts’ expectations of $5.37 billion.
Tesla’s auto business reported revenue of $5.18 billion in the second quarter, compared with $5.38 billion a year earlier, down 4 percent from $5.38 billion, and its share of revenue from regulatory credit, which the company received from other automakers to offset emissions, rose to $428 million from $354 million in the first quarter.
Tesla said in its earnings report that the second-quarter profit increase was due to a $48 million in deferred revenue recognition related to temporary reductions in employee compensation expenses, increased regulatory credit revenue and the release of the FullSelf Driving (FSD) feature, offsetting the impact of plant closures caused by the new crown pneumonia outbreak.
Tesla also said the production line at the Model Y plant in Shanghai is being built as planned and the first batch is expected to be delivered in 2021.
Tesla has announced it will deliver at least 1 million vehicles by the end of 2020, despite a nearly six-week suspension of production at its California plant.
On a second-quarter earnings conference call, Tesla CEO Elon Musk announced that Tesla will build its next plant near Austin, Texas. Tesla plans to dedicate its auto plant in Fremont, California, to production of Model S and Model X vehicles in all markets, as well as model 3 and Model Y in western North America.
Musk said the Texas plant will be used to produce Cybertruck, Semi and Model 3 and Model Y vehicles for eastern North America.
Musk said the localization of parts supplied at Tesla’s Shanghai plant was significant and the domestic component rate was expected to reach 80 per cent by the end of 2020.
Tesla’s shares rose 6 percent after the second-quarter results. Tesla’s share price has soared in recent months, rising more than 500 percent over the past year.