SAN FRANCISCO: Electric vehicle company Tesla posted a surprise profit of $16 million during the first quarter of 2020 despite temporary disruptions in productions because of COVID-19 restrictions.
"This is the first time we've achieved positive GAAP net during a seasonally weak first quarter," Tesla CEO Elon Musk said in an earnings call on Wednesday.
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Tesla's revenue in Q1 2020 reached $5.9 billion, a rise of nearly $1.5 billion a year ago. the corporate ended the quarter with $8.1 billion of money.
Tesla said the volume growth within the Gigafactory Shanghai led to a material improvement in margins of locally made Model 3 vehicles.
The Model Y also contributed to profits, Tesla said, adding that it represented the first time in its history that a brand new product has been profitable in its first quarter.
"Even with all the challenges, we achieved a 20 per cent automotive gross margin, excluding regulatory credits while ramping two major products," Musk said.
Musk said that the COVID-19 pandemic has caused the corporate to look closely at its cost structure and to be more efficient as a corporation.
"And we came to a conclusion that the correct move was actually to still expand rapidly, still invest into the future and in new technologies, even though it's risky," Musk said.
"And we've talked to a number of our key investors, and they support that approach also. So I feel that there is clearly an uncertain future ahead. it is a bit of a bumpy road. But I feel the long-term prospects are extremely good," he added.
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Tesla shares rose over 9 per cent after the company posted its Q1 profit.