Unlike most companies releasing their Q1 financials, Tesla has exceeded positive expectations. The electric car company despite suffering both production and demand setbacks has come out on top. Its resilience in this tough time will serve as motivation to other companies such as Ford which as I reported has suffered a $2B loss; read here.
Its positive results notably come at a time when its founder Elon Musk has been slamming the government for the economic lockdown. The founder called the lockdowns “fascists”. He further explained that it was forcibly locking people in prison in their homes. On top of this, he warned the lockdown would lead to an extreme economic downturn. His comments have not been received well by some including Mark Cuban who believe that every decision being made right now should be led by a need to ensure health and safety for all.
Tesla’s books show that its revenue jumped 32% to nearly $6 billion. As a result, its shares jumped by 9% as investors celebrated the growth.
Uncertain Times Ahead For Tesla
Despite the growth, the company has warned investors that the future is uncertain. In a letter to investors, it noted;
“It is difficult to predict how quickly vehicle manufacturing and its global supply chain will return to prior levels…Due to the wide range of potential outcomes, near-term guidance of net income and free cash flow would likely be inaccurate.”
It is then clear why Elon Musk wants the economy to go back to a normal state. As long as there is a lockdown, demand and production will be impacted hard leading to losses.
Prior to the pandemic, the year 2020 was set up to be the company’s biggest year yet. In the first three months of the year, its share had more than doubled. Because of this strong momentum, the manufacturer is still looking strong. The future is, however, uncertain. The hope is that lockdowns around the world are lifted and Tesla can get back to manufacturing and selling its revolutionary cars. Until then, Musk will continue to cry out to the government.