Tesla Q2 2020 earnings report shows fourth consecutive profitable quarter
It's impressive that the carmaker was able to make money despite factory shutdowns and the coronavirus-related economic malaise of the past few months.
After four consecutive quarters of profitability, Elon's probably feeling good.
Given the state of the global economy and the factory shutdowns mandated by the state of California, it's been pretty tricky to predict just how Tesla's second-quarter financials would turn out. But Tesla has released its Q2 earnings report Wednesday, and we see that it's weathered the coronavirus pandemic even better than expected.
What does that mean exactly? To start with, Tesla was once again profitable. It didn't make a crazy amount of money, but the fact that it did better than break even is pretty amazing. Specifically, the Big T managed to net $104 million of income, making this the fourth consecutive profitable quarter for the electric carmaker.
Tesla was able to turn a profit partly because it worked to reduce expenses by furloughing employees, thus decreasing its payroll expenses. According to the company's report, it also managed to sell a healthy number of vehicles, over 90,000 in fact -- though at a reduced average selling price -- even though production was down by 20% quarter over quarter because of California's shelter-in-place restrictions.
From a technological standpoint, Tesla's most significant achievement in Q2 was the certification of the Model S' new range of 402 miles. This makes S the longest-range electric vehicle that is available to buy today. The company experienced a little friction with the EPA over its certification process and asked the agency to retest, so we've expected this 400-plus mileage range for a while.
Tesla is also hard at work on improving its Autopilot software by using customers' vehicle data to improve the neural net behind it. Notably it now allows Autopilot to stop at or drive through an intersection with driver confirmation. The company claims it's not far from being able to remove the confirmation step entirely.
The company has also been going a little construction crazy. The Gigafactory in Shanghai is getting its Model Y lines installed, and its Model 3 lines tweaked for efficiency. Construction is officially underway at Gigafactory Berlin as well, and finally, Tesla mentioned that it's selected a location for its next US Gigafactory. If we were going to bet on it, we'd guess this is the Austin property that has been rumored to be the home of Cybertruck production -- though that's not confirmed.
There's likely to be plenty more information that we'll get as part of the company's earnings call later Wednesday, so stay tuned to Roadshow for all your Tesla news.
