Elon Musk and Tesla report a profit for the first quarter, despite COVID-19
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Tesla took analysts by surprise and reported a profit for the first three months of the year. Elon Musk’s electric car company made $16 million. That’s despite what the pandemic is doing to car factories and the ability of people to shop and to pay for new cars.
The start of 2020 was Tesla’s third profitable quarter in a row.
Garrett Nelson, analyst at CFRA, says that’s because the timing of this pandemic could have been worse for Tesla. The company had just finished spending a lot of money on the launch of the Model Y small SUV and the build-out of a factory in China.
“The fact that they’re not burning a lot of cash or spending a lot on projects really helps them in this environment,” Nelson said.
A factory in Germany and a new plant in the U.S. are still in the early stages, and Nelson says Tesla could defer those expenses if necessary. But in typical Elon Musk style, the CEO told investors on a call Wednesday that the company would push ahead.
“We are absolutely pedal to the metal on new products and expanding the company,” Musk said.
Tesla says it’s still too soon to say how the next quarter, and the rest of 2020, will go. A lot depends on how soon it can resume production of the Model Y, seen as crucial to the future of the company.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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