Record sales of electric vehicles in the fourth quarter helped to push Tesla Inc to its second-straight quarterly profit, giving bullish investors optimism that sustained profits are ahead.
The Palo Alto, California-based company said that it made a US$105 million net profit in the October-to-December period, or US$0.56 per share, but still posted an annual loss of US$862 million.
The fourth-quarter earnings continued Tesla’s meteoric stock appreciation. Shares on Wednesday rose nearly 12 percent in after-hours trading to US$648.50.
Photo: Reuters
The company said in its quarterly investor letter that it is starting to increase production of the Model Y small sports utility vehicle in Fremont, California. Deliveries are to start by the end of March.
The Model Y would be capable of going up to 507km per charge, an increase over Tesla’s previous estimate of 451km, the letter stated.
Tesla expects to “comfortably” exceed production of 500,000 vehicles this year at its factories in Fremont and Shanghai, with Model Y production in Shanghai to start next year.
The firm also said that it plans to start producing limited numbers of its electric semi-truck this year.
Tesla is making progress on a full self-driving feature, CEO Elon Musk said in a conference call on Wednesday, adding that it would be deployed this year.
However, the company still has a long way to go before its vehicles can travel without humans taking the wheel.
The new coronavirus outbreak in China could temporarily delay production at the company’s new Shanghai factory, chief financial officer Zachary Kirkhorn said.
A delay might have a small impact on Tesla’s first-quarter profitability.
The company has not seen any disruptions in the supply of parts due to the outbreak, but it is monitoring the situation, he said.
“This is an evolving story,” Kirkhorn added.
Demand for Tesla’s “Cybertruck” pickup has been high, Musk said, without providing numbers.
“The demand is just far more than we could reasonably make in the space of three or four years, something like that,” he said.
Tesla said in its investor letter that it is moving ahead with preparations for a factory near Berlin, and the first deliveries from the factory are expected next year.
Tesla expects net profits going forward, with some possible exceptions at times surrounding the launch of new products.
“We continue to believe our business has grown to the point of being self-funding,” the letter said.
Tesla’s fourth-quarter revenue rose 2 percent to US$7.38 billion, as the firm delivered about 112,000 vehicles during the period and a record 367,500 for the full year.
Tesla continued to build its cash balance during the fourth quarter, reporting US$6.27 billion available, up from US$5.34 billion at the end of the third quarter.
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