Tesla turned a profit of $16 million in the first quarter of 2020, which was surprising insofar as the pandemic had just begun to ramp up and Tesla had never had been profitable three consecutive quarters. Most expect that streak to end this quarter, but CEO Elon Musk isn’t so sure.
The challenges Tesla faced the past three months have been pretty much the same as any other automaker, with shelter-in-place orders in a lot of its markets and a factory shutdown that lasted almost two months. But the timing of the pandemic was especially bad for Tesla because it came just as the Model Y was rolling out, a car that Tesla hopes will eventually outsell the rest of its lineup combined.
No one would’ve blamed Tesla for not turning a profit this quarter, in other words, which made it surprising that Musk said in an email to employees this week that the company was close to breaking even.
“Breaking even is looking super tight,” Musk wrote in an email to employees obtained by Bloomberg and first reported by Electrek. “Really makes a difference for every car you build and deliver. Please go all out to ensure victory!”
Musk sent the email yesterday, ahead of the second quarter ending today, though Tesla won’t be announcing its financial results until the end of the month.
Also as Bloomberg notes, this is hardly the first time Musk has emailed his employees to tout something that may or may not turn out to be true.
Musk, 49, has routinely sent emails to rally the troops at the end of a quarter, though Tesla hasn’t always lived up to the expectations set by his internal memos. The company reported a record 97,000 deliveries for the three months that ended in September, falling short of the 100,000 mark he floated in an email to staff days earlier.
After the first quarter’s small profit, some Tesla watchers made a lot of the fact that the company had sold $354 million in regulatory credits, which of course are not cars, something Tesla’s critics are fond to point out. But that also sort of misses the point, as Tesla took in $5.9 billion in revenue that quarter, making the credit sales a single-digit percent of that.
The point is that Tesla was selling a lot of cars in the Before Times, and like other automakers, it has spent the last month and a half since production restarted trying to get back to those heights. We don’t know yet if those efforts will be enough, but, like last year, it seems safe to say that Musk is probably at least in the ballpark.