Tesla extends profit run; Shanghai production delayed

NEW YORK • Tesla posted its second quarterly profit in a row on Wednesday and said it was ahead of schedule on its latest model, offering renewed confidence as it enters what could be a pivotal year.

The electric carmaker reported US$105 million (S$143 million) in net income for the quarter.

Although that figure was down from US$143 million for the previous quarter, investors were far from daunted.

Tesla shares, which have nearly doubled in the past year, jumped 13 per cent after hours on Wednesday, cracking the US$600 mark for the first time.

Tesla's results suggest it has overcome the problems that plagued it in the first half of last year, when it lost more than US$1 billion and scrambled to raise capital.

The carmaker, which has never had a profitable year, ended last year with a loss of US$862 million, less than its two previous annual losses.

Revenue was US$7.4 billion in the fourth quarter, the company said, up from US$6.3 billion in the third quarter. It said it expected to "comfortably exceed" 500,000 vehicle deliveries this year, about a third more than last year.

Still, investors remain deeply divided over the company's value, which has more than doubled in recent months to eclipse the market capitalisations of Volkswagen, Ford, General Motors and other established carmakers.

Some predict that Tesla will dominate the growing market for electric vehicles, while others question both the size of that market and Tesla's ability to ward off competition. Tesla's pursuit of a global expansion rests largely on the success of a new factory in Shanghai, which this month began regular delivery of vehicles built there.

But production at the Shanghai factory is expected to be delayed by as much as a week and a half because of an official shutdown that has affected many businesses in response to the spread of the coronavirus, Tesla's chief financial officer Zach Kirkhorn said.

Tesla said it expected to remain profitable going forward, "with possible temporary exceptions". It ended last year with US$6.3 billion in cash and cash equivalents, a 70 per cent rise from the year before.

In addition to overseas growth, Tesla's success this year is likely to be defined by the roll-out of the Model Y, which will have an estimated range of 507km per charge, up from a previous estimate of 450km, the company said on Wednesday.

The introduction of the relatively affordable Model 3 last year led Tesla to a record number of deliveries in the fourth quarter, accounting for about 80 per cent of vehicles sold in that period.

NYTIMES, REUTERS