Highflying Tesla reports surprise profit despite COVID-19 upheaval

by John Biers

Tesla reported a surprise second-quarter profit Wednesday as it confirmed ambitious targets for 2020 car deliveries despite the coronavirus pandemic and announced plans for a new auto factory in Texas.

The result clears the way for the highflying company led by Elon Musk to potentially join the S&P 500. A requirement for the prestigious Wall Street index is four successive profitable quarters, which Tesla has now achieved.

Tesla shares — which have exploded in 2020 as the company has met key targets — climbed further following the results. Several analysts that have praised Tesla’s accomplishments view the rise in valuation as excessive.

Musk praised Tesla’s staff for “exceptional execution” during a period that included the weeks-long closure of its California plant due to the coronavirus pandemic and said he looked forward to “continue scaling” Tesla up to enable production levels closer to that of conventional auto giants.

“I’ve never been more optimistic or excited about the future of Tesla,” Musk said on a conference call with analysts and investors.

Musk, who has long flouted the unwritten rules of button-down CEOs, avoided the sort of fights with analysts that have occasionally surfaced on conference calls.

But he maintained an informal air throughout the 60-minute session, saying he was interested in hiring “revolutionary actuaries” for an insurance project being developed and effusing about a new factory as an “ecological paradise.” (AFP)