Tesla to focus on making cars affordable after profit boost

Tesla boss Elon Musk has said the electric vehicle maker will prioritise boosting growth by making its car more affordable after the firm posted a fourth consecutive quarterly profit for the first time.

Tesla achieved a net profit of $104 million (£80.5m) between April and June, with total revenues of $6.04 billion (£4.68bn). Although revenues were down 4.9% year on year, the figure still exceeded estimates given the ongoing market uncertainty caused by the coronavirus.

Posting a profit for four consecutive quarters is a major milestone for Tesla and clears the way for the firm’s stock to be included on the S&P 500 index, which would likely further increase demand for shares. Tesla share value has risen by more than 500% over the past year.

In a conference call about the financial results, Musk said he remained concerned about the price of Tesla’s cars. He said: “The thing that bugs me most right now is that our cars are not affordable enough and we need to fix that.

“We just want to be like slightly profitable, maximise growth and make the cars as affordable as possible.”

In the UK, the Model 3 has a starting price of £40,490. Musk noted that the high price of batteries is a key reason that electric cars remain relatively expensive to buy and urged mining firms to increase production of nickel – a key element in their production.

He added: “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently, in an environmentally sensitive way.”

Tesla produced 82,272 cars in the past three months, with 90,891 deliveries to customers. While only 5% lower year on year, production was down 59% compared with the first three months of 2020, due to the forced closure of Tesla’s factory in Fremont, California because of the coronavirus lockdown.

Of the 90,891 cars Tesla delivered to customers, 80,277 were Model 3 or Model Y, with 10,614 Model S or Model X. The firm said it is still aiming to deliver half a million cars this year, although it noted that Covid-19 disruption had made this “difficult”.

Tesla to build Cybertruck in Texas

Tesla has also confirmed that it will build a new factory in Texas, which will be used to make the Cybertruck and a second production line for the Model Y SUV.

The plant will be built in Travis County near Austin, the state capital of Texas, and will employ more than 5000 workers. Musk said work on the factory is already under way. Although it is not known when it will open, Tesla has previously said the Cybertruck will go on sale in late 2021.