Record sales push Tesla to 2nd straight quarterly profit

DETROIT (AP) — Record electric vehicle sales in the fourth quarter helped to push Tesla Inc to its second-straight quarterly profit, giving bullish investors optimism that sustained black ink lies ahead.

The Palo Alto, California, company said it made a USD105 million net profit from last October through December, or 56 cents per share, but still posted an annual loss of USD862 million. The fourth-quarter earnings continued Tesla’s meteoric stock appreciation. Shares rose nearly 12 per cent in after-hours trading on Wednesday to USD648.50

The company said in its quarterly investor letter that it is starting to ramp up production of the Model Y small SUV in Fremont, California. The Model Y is a key product for Tesla’s future because consumers are buying smaller utility vehicles. Deliveries are to start by the end of March.

The Model Y will be able to go up to 507 kilometres per charge, an increase over Tesla’s previous estimate of 451 kilometres, according to the letter.

Tesla also expects to “comfortably” exceed production of 500,000 vehicles this year at its factories in Fremont and Shanghai. Model Y production in Shanghai will start in 2021.

The company also said it plans to start producing limited numbers of its electric semi truck this year.

Musk said demand for the company’s angular ‘Cybertruck’ pick-up has been high, but gave no numbers.

“The demand is just far more than we could reasonably make in the space of three or four years, something like that,” he said.

Tesla also said in its investor letter that it’s moving ahead with preparations for a factory near Berlin, and the first deliveries from the factory are expected next year.

Tesla expects net profits going forward, with some possible exceptions at times surrounding the launch of new products.

“We continue to believe our business has grown to the point of being self-funding,” the letter said.

The company logo shines off the grille of an unsold 2020 Model X at a Tesla dealership in Littleton, Colorado on November 10, 2019. PHOTO: AP