Tesla Q1 2020 investor report: Hot damn, the Big T is still profitable!

Tesla’s finances in Q1 look A-OK.

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Well, it’s that time once again when Tesla reports its quarterly earnings, and while this usually has some notable tidbits about the inner workings of one of the automotive industry’s most mercurial and enigmatic companies, Q1 2020 has a few other factors contributing to it being particularly interesting.

The first thing that needs to be talked about is Tesla’s absolutely insane stock price. As of the time of writing this, it’s hovering around $790, which makes it by far the most valuable automotive stock out there right now. Why has the Big T’s value gone through the roof in the last few months? According to analysts, the main reason is profitability. Q1 of 2020 marks the first time that Tesla has been able to turn a profit (a cool $1.234 billion gross) in this case, in what is traditionally a challenging quarter to do so, given the post-Christmas penny pinching that people tend to do.

Next, we have to talk about Tesla’s approach to the COVID-19 pandemic, which has been peeing in the Wheaties (metaphorically speaking, of course) of the rest of the automotive industry around the globe. The company initially resisted closure of its California facilities in March, and as of Wednesday, Elon Musk is lobbying for the lifting of shelter-in-place restrictions on Twitter. It’s a bad look for the company, and we’ll be curious to see if it hurts Musk or Tesla if/when the pandemic ends.

What will all of the plant closures and the likely global economic downturn mean for Tesla? Well, given how hard China was hit by coronavirus, demand for Shanghai-built Model 3s may be softer than anticipated. Still, Tesla claims in its Q1 update that gross margin on Chinese Model 3s is getting close to parity with Fremont-built cars, so things aren’t so bad on that front. In fact, Tesla posted a gross margin on all automotive products of 25.5%, which exceeds its longtime 25% target.

Tesla claims it was on track to beat its own record for vehicle deliveries before its production facilities were forced to idle, something that was doubtless bolstered by the early release of Model Y to the public. However, Y and 3 deliveries are lumped together in Tesla’s reporting, so it’s impossible to say by how much. The company has also been at work improving its legacy models, namely the Model S, which saw a software efficiency-sourced bump to 391 miles of maximum range. Models S and X are still a small minority of Tesla’s sales, but the upgrade is notable.

Tesla’s side hustle making solar roofs also saw a big bump in production. The Big T claims that it finally hit the 1,000 systems per week milestone. That doesn’t sound like a ton, but when you consider how many individual tiles exist on even a basic roof, the numbers are bigger than they seem. Supercharger installations are also on the rise, with 96 new stations added to the network. This brings the total network size to 1,917 stations and a total of 17,007 charger connections.

So, what does this all mean? It means that Tesla is probably in half-decent shape, but that the numbers for Q2 will likely be less impressive, though that’s sure to mirror similar changes for the automotive industry as a whole.

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