Currently reading: Tesla to focus on making cars affordable after profit boost
Electric car maker received boost after recording fourth consecutive quarterly profit for the first time
James Attwood, digital editor
News
3 mins read
23 July 2020

Tesla boss Elon Musk has said the electric vehicle maker will prioritise boosting growth by making its car more affordable after the firm posted a fourth consecutive quarterly profit for the first time.

Tesla achieved a net profit of $104 million (£80.5m) between April and June, with total revenues of $6.04 billion (£4.68bn). Although revenues were down 4.9% year on year, the figure still exceeded estimates given the ongoing market uncertainty caused by the coronavirus.

Posting a profit for four consecutive quarters is a major milestone for Tesla and clears the way for the firm’s stock to be included on the S&P 500 index, which would likely further increase demand for shares. Tesla share value has risen by more than 500% over the past year.

In a conference call about the financial results, Musk said he remained concerned about the price of Tesla’s cars. He said: “The thing that bugs me most right now is that our cars are not affordable enough and we need to fix that.

“We just want to be like slightly profitable, maximise growth and make the cars as affordable as possible.”

In the UK, the Model 3 has a starting price of £40,490. Musk noted that the high price of batteries is a key reason that electric cars remain relatively expensive to buy and urged mining firms to increase production of nickel - a key element in their production.

He added: “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently, in an environmentally sensitive way.”

Tesla produced 82,272 cars in the past three months, with 90,891 deliveries to customers. While only 5% lower year on year, production was down 59% compared with the first three months of 2020, due to the forced closure of Tesla’s factory in Fremont, California because of the coronavirus lockdown. 

Of the 90,891 cars Tesla delivered to customers, 80,277 were Model 3 or Model Y, with 10,614 Model S or Model X. The firm said it is still aiming to deliver half a million cars this year, although it noted that Covid-19 disruption had made this “difficult”. 

Tesla to build Cybertruck in Texas

Tesla has also confirmed that it will build a new factory in Texas, which will be used to make the Cybertruck and a second production line for the Model Y SUV.

The plant will be built in Travis County near Austin, the state capital of Texas, and will employ more than 5000 workers. Musk said work on the factory is already under way. Although it is not known when it will open, Tesla has previously said the Cybertruck will go on sale in late 2021.

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The Texas factory will be the firm’s second dedicated car factory in the US, joining the Model 3/Y plant in Fremont. Tesla also constructs cars at its Nevada factory. It recently opened a gigafactory in Shanghai, China, and is working on its first European production facility near Berlin in Germany.

Basing the Cybertruck facility in Texas offers several benefits for Tesla. The state is the biggest market in the US for pick-up trucks and also has no corporate income tax. Travis County has also offered Tesla around $60m (£46m) in tax breaks. 

READ MORE

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Tesla to build first European factory in Germany

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Tycoon 23 July 2020

Lest we forget editors,

Lest we forget editors, editors at large, etc etc saying Tesla would be dead by the end of 2017, 2018, 2019, 2020...

What I think we've established from that is, reviewers don't know shiet about running a company. And sometimes they don't even know about reviewing cars either. XD

xxxx 23 July 2020

Positive note

Wish I had a penny for all the posts saying Tesla would be burst by the end of the year. Well done Tesla and Musk for advancing BEV, giving us alternatives and batterling against the shorters and luddites of the world.

Peter Cavellini 23 July 2020

Billionaire!

xxxx wrote:

Wish I had a penny for all the posts saying Tesla would be burst by the end of the year. Well done Tesla and Musk for advancing BEV, giving us alternatives and batterling against the shorters and luddites of the world.

Was briefly the five richest person on the Planet, and he's pedalling Ev's, should they be marketing it as the People's car?

typos1 23 July 2020

I haven tread a single review

I haven tread a single review of the Model Y in Autocar. Y - lol - not ? I know we ve had the lockdown but couldnt they have paid a US journalist to write a review ? They have before.

lambo58 23 July 2020

Because Autocrat mag is

Because Autocrat mag is certainly no fan of musk or his cars. its been obvious for a long time