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Tesla Deliveries Slipped in Second Quarter Even as Pandemic Hit

  • July 02, 2020

While traditional automakers sell vastly more cars and earn billions of dollars more in profit than Tesla, Wall Street has grown increasingly optimistic about Tesla’s prospects this year. Some investors consider the company to be at the vanguard of the transition from petroleum-fueled cars and trucks to electric vehicles — a change that they believe older companies like Toyota, G.M. and Ford are ill prepared for.

Tesla has also seemed to overcome problems that had hobbled its ability to bring new cars to market and scale up manufacturing. The company successfully opened a second factory, in Shanghai, and has started building a third, near Berlin. It also started delivering the Model Y, a sport-utility vehicle that is expected to sell well because it starts at about $53,000, which is roughly what comparable luxury gasoline vehicles sell for.

Further, Tesla reported a profit in the first quarter, is generating cash from its operations and appears to have stabilized its financial situation. It ended the first quarter with $8 billion in cash, a dramatic turnaround for a company that had struggled to raise money at favorable terms in 2019.

“If you go back a year and a half, the question was, can these guys make it with the kind of capital expenditures they need to do,” said Joseph Osha, an analyst at JMP Securities. “That’s no longer a question.”

The company is also preparing to accelerate its expansion and is in the early stages of identifying a location for a fourth car factory. Tesla appears to be eyeing a site near Austin, Texas. In a recent county filing, the company said it could begin construction in the third quarter of this year at a 2,100-acre site that is currently occupied by a concrete plant.

Article source: https://www.nytimes.com/2020/07/02/business/tesla-sales-second-quarter.html

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