Tesla reported by far its best quarterly profit Wednesday and said it still hopes to hit its target of half a million car sales this year. The strong results and ambitious goal were good news to investors in the high-flying stock, which has gained more than 400% so far this year. Shares of Tesla climbed once again in after-hours trading on the earnings report.
There had been doubts that Tesla could achieve its goal of delivering 500,000 cars to customers this year, given the shutdown of its plant in Fremont California, earlier due to the Covid-19 pandemic ordered by local health authorities. It has delivered 319,000 cars in the first three quarters of this year.
Tesla reported net income of $874 million excluding special items, up 156% compare to what it made on that basis a year ago and nearly double its second quarter profit. Analysts had been forecasting earnings of $593 million. Including special items, net income came in at a more modest $331 million. That was more than triple its second quarter earnings, which were released as it was coming off of the temporary lockdown of its plant.
Musk talked about production timelines for those factories in the company’s earnings call. “I should make a point that for Berlin and Austin, we do expect to start delivering cars from those factories next year but because of the exponential nature of the spool up of manufacturing plants especially one with new technology, we’ll start off very slow at first and then become very large.” He cautioned investors that it could take 12 to 24 months even to hit full capacity at these new factories after they begin operations. Tesla previously planned to start production at the Berlin factory in July 2021.
When asked about the Cybertruck, Musk said he expects some deliveries of the truck — which resembles a large metal trapezoid — to begin by the end of 2021 “if things go well.” The Cybertruck was unveiled November 21, 2019. Musk has boasted that Tesla received hundreds of thousands of pre-orders for the vehicle shortly after its debut. At Tesla’s 2020 annual shareholder meeting and battery day presentation in September, Musk said that vehicle deliveries in 2020 would be up 30% to 40% from last year, implying a range from 477,750 to 514,500 deliveries total