While most financial markets have been put under strain due to the COVID-19 pandemic, Tesla continued it’s rampant upward trend this year. The California-based company managed to surpass analysts’ estimates turning over yet another quarter of profits. Chief Executive Officer of the company, Elon Musk, has claimed it to be the best quarter in the company’s history and still intends on hitting the initial target of 500 000 cars to be sold this year.
Exceeding all estimates
Tesla has managed to buck the trend set by competing auto companies and reported an enormous $8.77 billion in revenues for the third quarter. Not only was this a record quarter for the company, Tesla also managed to blow all estimates of revenue and earnings per share out of the water with an increase of 39% in net income from the same period last year. The success has been attributed to the immense efficiency the company has maintained despite the global pandemic. Massive growth in vehicle deliveries and operating income resulted in a 9.2% improvement of operating margins. Shares have also been following suit with a 4.37% increase in price observed on Thursday, this all contributes to the remarkable 405% increase the stock price has seen this year. Tesla’s stock price currently sits at $422.64 which has been considered by The Wall Street Journal as, “wildly overvalued”.
The company has been on the hotseat of many controversial opinions with a storm of empty proclamations by Elon Musk being the center point of debate. A second-generation roadster which had been mentioned as far back as 2017 has still had no public update. Self-navigating Tesla taxis were also on the cards in April of 2019 but unfortunately, that proved to be the latest update on the matter.
Increased global presence
Tesla has also bolstered its global presence by mass producing Model 3 sedans in China. This being a result of the shipping demand from Europe. To accommodate the global success, it was announced last year that the company would be building yet another Gigafactory in Berlin. Elon Musk has publicly stated that the Gigafactory would be the core of his “template for future growth”. Softa Bakhta, a marketing strategy analyst at Daxue Consulting claims “the production cost of the Chinese Tesla Model 3 has dropped by 20% to 28%”. This next phase of growth could prove promising to potential shareholders.
Tesla has managed to deliver 139 300 vehicles during the third quarter, bringing the tally to a total of 319 000. This feat will have to be beaten within the next quarter to reach the initial target. Production has been increased within the Fremont factory to ensure the target is met, should Tesla succeed, a new record quarter may be on the cards. The attempt made by the company to broaden itself into the truck sector will also bear fruit at the end of next year with the first Cybertrucks being shipped. This follows the announcement at the end of last year unveiling the truck to the public.