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Tesla Turns A Q1 Profit On The Back Of Regulatory Credit Sales
NEWS
Tesla Turns A Q1 Profit On The Back Of Regulatory Credit Sales
Bradley Brownell
Yesterday 9:00PM • Filed to: TESLA
With an international pandemic raging at the tail end of Q1, everything in the automotive sector was doom and gloom. Sales were down across the board from nearly every automaker in nearly every market. America’s leading electric car company bucked that trend, however, not only delivering more cars in Q1 2020 than it had across the same period in 2019, but also turning a $16 million profit in the process from $5.985 billion in revenue.
In spite of the fact that the company figurehead is a megalomaniacal dingus with an overactive Twitter account, Tesla managed a relatively impressive Q1 with results buoyed by a reduction in operating expenses, an increase in deliveries, and a huge spike in sales of emissions exemption credits to other automakers.
Q4 of 2019 was good to Tesla, as it was also the first full quarter of operation at its Shanghai factory. Obviously the covid-19 pandemic threw a wrench in the works by February as demand dropped off and international supply chains were severed. The company still managed to push out a profit, in part because it kept the doors to its factory open even after government mandates to close them, pushing its new Model Y deliveries beginning in mid-March. This marked Tesla’s third straight quarter of profitability.
Tesla has long turned its regulatory credits into a financial boon, but as new European emissions regulations come into play, its credits are even more important for other companies—like Daimler and FCA—to grab up. Tesla’s ZEV credit program has brought the company over $2 billion in revenue since 2010 when it started selling those credits to automakers to offset sales of polluting vehicles. While that number hovered around the $100 million mark per quarter across 2019, Tesla sold a whopping $354 million in credits in Q1 2020.
Earning $16 million from a revenue of nearly $6 billion is a narrow profit, to say the least, but it’s a profit all the same. Across the same period in 2019, Tesla saw a $702 million loss.
{snip}
Tesla Turns A Q1 Profit On The Back Of Regulatory Credit Sales
Bradley Brownell
Yesterday 9:00PM • Filed to: TESLA
With an international pandemic raging at the tail end of Q1, everything in the automotive sector was doom and gloom. Sales were down across the board from nearly every automaker in nearly every market. America’s leading electric car company bucked that trend, however, not only delivering more cars in Q1 2020 than it had across the same period in 2019, but also turning a $16 million profit in the process from $5.985 billion in revenue.
In spite of the fact that the company figurehead is a megalomaniacal dingus with an overactive Twitter account, Tesla managed a relatively impressive Q1 with results buoyed by a reduction in operating expenses, an increase in deliveries, and a huge spike in sales of emissions exemption credits to other automakers.
Q4 of 2019 was good to Tesla, as it was also the first full quarter of operation at its Shanghai factory. Obviously the covid-19 pandemic threw a wrench in the works by February as demand dropped off and international supply chains were severed. The company still managed to push out a profit, in part because it kept the doors to its factory open even after government mandates to close them, pushing its new Model Y deliveries beginning in mid-March. This marked Tesla’s third straight quarter of profitability.
Tesla has long turned its regulatory credits into a financial boon, but as new European emissions regulations come into play, its credits are even more important for other companies—like Daimler and FCA—to grab up. Tesla’s ZEV credit program has brought the company over $2 billion in revenue since 2010 when it started selling those credits to automakers to offset sales of polluting vehicles. While that number hovered around the $100 million mark per quarter across 2019, Tesla sold a whopping $354 million in credits in Q1 2020.
Earning $16 million from a revenue of nearly $6 billion is a narrow profit, to say the least, but it’s a profit all the same. Across the same period in 2019, Tesla saw a $702 million loss.
{snip}