Tesla in the green despite the Covid and “fascist” confinement

Posted Apr 30, 2020 8:59 amUpdated on Apr 30, 2020 at 1:25 p.m.

Small feat and great anger. Elon Musk said on Wednesday that the containment measures intended to curb the spread of the Covid-19 pandemic and which plunged the world economy into unprecedented lethargy were “fascists”. His company, Tesla, nevertheless made a surprise profit of $ 16 million over the first three months of the year, despite the difficulties encountered by its “gigafactories”. In the first quarter of 2019, losses had reached 702 million.

“To say that they [les Américains] cannot leave their home and they will be arrested otherwise it is fascist. It is not democratic, it is not freedom. Give the people back their damn freedom! Strangled the entrepreneur during a conference call during which he was asked mainly about the resumption of activity at the Fremont, California plant.

The most densely populated state in the United States (40 million inhabitants) was the first to order the total containment of its population to the chagrin of Elon Musk who only resolved to close the factory for three days later, March 19, after a standoff with the authorities. And the measures will not be lifted for several weeks, warned the governor, Gavin Newsom, during a recent press briefing.

The best first quarter in its history

Enough to annoy the boss of Tesla, who had to put aside his plans to reopen Fremont on May 4. Elon Musk has been pleading for weeks for easing containment measures, saying that the risk of panic exceeds the risk of the virus itself – arguments taken up by Donald Trump and demonstrators, sometimes armed, who protest around the world. country.

Frustration is first of all economic: Tesla, like the whole industry, is forced to slow down, while the manufacturer has never seemed in such a good position to win its crazy bet to impose itself on the electrical market. Good results in recent months have soared the share price, to the point that the firm has reached a higher valuation than Renault, PSA and Volkswagen combined.

The first quarter only confirmed the trend. Buoyed by the contraction of its operational expenses (-13% over a year) and the sale of its CO2 credits to the competition – $ 354 million in pure profits -, the company had never achieved such a good performance out of the three first months of a fiscal year. Above all, turnover increased by 32%, driven by the growth in vehicle delivery.

Tesla also claims that Model Y, its all-new production, has not only been launched ahead of schedule, but has already generated profits in its first quarter of capitalization, a first in the history of the company. . Enough to close the title up more than 4% on Wall Street, Wednesday. And to make it climb by almost 11% in after-market exchanges. The firm weighs $ 147 billion on the stock market, close to its February high.

Looking to China

The objective of delivering more than 500,000 vehicles in 2020 is however in brackets and the shutdown of the Fremont factory will weigh painfully in the second quarter – the closure having occurred a week before the closure of the first.

For the next few months, Tesla’s activity should be played out in China: the Shanghai factory has suffered only a brief interruption and the manufacturer will benefit from a partnership with the producer of CATL batteries to further decrease the price of the Model 3 (under 42,000 dollars). What continue to grow in a recovering market.

NIO, the “Chinese Tesla”, finds $ 1 billion

While investors were seriously concerned about the liquidity situation of NIO, the “Chinese Tesla” listed on the New York Stock Exchange, the manufacturer will ultimately be bailed out by Chinese public investors. Companies linked to the Hefei municipal government will invest 7 billion yuan ($ 1 billion) in a new company, called NIO China, to which NIO will transfer its main assets and activities. NIO will own 75.9% and Chinese investors 24.1%. The company was already in trouble before the health crisis, due to the lack of sufficient sales of its ES8 and ES6 electric SUVs. It lost $ 1.6 billion last year, and had only $ 152 million in cash at the end of 2019.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.