Tesla gave its skeptics another chance by generating solid second quarter earnings, and its fourth consecutive quarterly earnings, even amid the coronavirus pandemic.
The California-based automaker also announced Wednesday that it will advance plans to establish a second assembly plant in the United States, awarding the award to Austin, Texas. The Lone Star State had been fighting a multi-state bidding war. Tesla already operates two auto plants, including its original factory in Fremont, California, and another in Shanghai that opened last year. A third facility near Berlin is under construction.
In a conference call with analysts and reporters, Tesla CEO Elon Musk pulled out a list of things he said Tesla has in store, including new vehicles and other lines of business that could substantially increase future revenue.
“I’ve never been more excited or optimistic about Tesla’s future in the company’s history,” he said, adding: “There is so much to be excited about that it is almost difficult to fit into this call.”
Tesla officials pointed to a number of things that helped drive Tesla’s fourth consecutive quarterly profit, including not only its new Model Y and the China plant, but also its growing presence in the energy storage business.
“Tesla Energy will be bigger than the automaker,” Musk said during the company’s quarterly earnings call on Wednesday night, signaling a shift to sustainable sources such as wind and solar.
Looking ahead, Musk outlined plans for an expanded line of battery electric vehicles, and the company will launch production of its heavy-duty Semi truck next year. It is also moving forward with the development of its Cybertruck truck. In the longer term, Musk suggested, it may be “reasonable to assume” that Tesla will add a compact vehicle, “and probably a larger capacity passenger vehicle.” However, he did not offer additional details on Wednesday night.
“It’s almost getting to the point where I can get from home to work without intervention,” CEO Elon Musk said of his custom Tesla.
Tesla has indicated that it sees substantial opportunities to further expand vehicle production and sales, but Musk succinctly summed up his approach to growing the business by saying: “We want to be a little profitable and maximize growth and make cars the lo as affordable as possible. ” “
“In any case, our cars are not affordable enough,” he acknowledged. “We want to fix that.”
Musk and other Tesla executives pointed to various steps the company is taking to achieve that, including modifications that will simplify the manufacturing process.
However, they did not directly address current concerns about Tesla’s quality. Tesla has been receiving strong criticism for issues like faulty rear seats with the Model Y which, according to a recent JD Power study, left the automaker in last place when it came to vehicle quality among nearly three dozen Different brands competing in the US market.
But the issue of addressing manufacturing issues was the subtext of several comments made by Musk and his management team during the quarterly earnings call.
In addition to adding new models to the line, Tesla sees other ways to expand its revenue. Zach Kirkhorn, the company’s chief financial officer, said he is looking for ways to generate subscription revenue using its over-the-air communications technology. Musk also said that as Tesla moves forward with plans to launch a fully autonomous driving system, “That is worth at least $ 100,000 per car,” although he did not explain how that would be generated.
Proposing a fully hands-free version of the current Tesla autopilot system, Musk said, is his most immediate and most important priority, adding that the conversion could happen “overnight” using over-the-air updates and could cause Tesla vehicles are “five times” more valuable.
Musk told his audience that he is already testing the technology in his own vehicle and that it is “really, much better than people think.” It’s amazing. It’s almost reaching the point where I can get from home to work without intervention. ”
Four consecutive quarters of earnings now make Tesla eligible for inclusion in the S&P 500 for the first time, likely ensuring that the company becomes part of many Americans’ retirement savings plan.
