May 30, 2023

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Tesla growth continues despite economic upheaval

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Tesla boss Elon Musk

Electric car maker Tesla has shrugged off the economic upheaval caused by the pandemic to report its fourth quarterly profit in a row.

The California company earned $104m (£82m) in the three months to 30 June, with the growth setting it on course for inclusion in the S&P 500.

That means Tesla’s shares, already surging, will see even more demand from investors who track the index.

The stock crested higher in after-hours trading Tesla released the results.

Tesla said its bottom line was helped by its new factory in China, where costs are lower.

In the US, the pandemic forced boss Elon Musk to keep the company’s main factory in California closed until mid-May.

Ahead of expectations

While the shutdown weighed on the firm’s output, it still beat analyst expectations.

Tesla said it produced 82,272 cars and delivered 90,650 to customers, down about 5% from the same quarter in 2019. The decline hit revenue, which also fell about 5% to $6bn.

But the overall resilience marks a contrast with rival car-makers, such as General Motors, many of which have reported sales declines of more than 30%.

Tesla said it still hoped to deliver on promises to make 500,000 vehicles this year.

“We have the capacity installed to exceed 500,000 vehicle deliveries this year, despite recent production interruptions,” the company said. “While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target.”

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Tesla’s share price has roughly quadrupled since the start of the year, from $430 to more than $1,550.

The eye-popping increase has added to the long-running debate over Tesla, which many critics maintain is overvalued.

This month, the firm overtook Toyota as the world’s most valuable carmaker, with a market worth of almost $300bn – although the Japanese company sold about 30 times more cars last year.

On 1 May, Mr Musk himself tweeted Tesla’s share price was too high. The rise has helped propel him into the ranks of the world’s 10 richest people, according to billionaire rankings by Bloomberg and Forbes.

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