Tesla Posts Strong Q1 Performance Despite COVID-19 Challenges... 40% Increase Year-on-Year

Q1 Earnings Fall Short of Targets but Exceed Market Expectations

Stock Price Surges 17% in After-Hours Trading Following Earnings Announcement

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jaehee] Despite the adverse impact of the novel coronavirus (COVID-19), U.S. electric vehicle manufacturer Tesla posted solid first-quarter earnings. Although the results fell slightly short of the company's initially announced targets, they surpassed market expectations, causing Tesla's stock price to surge more than 10% in after-hours trading on the day.

According to CNBC on the 2nd (local time), Tesla delivered approximately 88,400 vehicles in Q1 this year. This represents a 40% increase compared to the same period last year (about 63,000 vehicles). While this figure is below the 100,000 units target set by Tesla CEO Elon Musk, it exceeds the market research firm FactSet's estimate of 79,900 units.

Tesla announced that it delivered a total of 76,200 units combining Model 3 and Model Y, and about 12,200 units combining the premium models Model S and Model X. The market expectations for each model were 68,674 units and 11,234 units, respectively.

Following the announcement of results that exceeded market expectations, Tesla's stock price surged 17% to $531 in after-hours trading. However, this is only about half of Tesla's stock price peak two months ago.

Earlier, Tesla had shut down its Shanghai factory in China for about 10 days at the end of January due to the impact of COVID-19. Subsequently, the Fremont factory in California, USA, has also been halted since the 23rd of last month. The Fremont factory, which employs about 10,000 people, has an annual production capacity of 500,000 vehicles.

Analysts' previous estimates took into account the spread of COVID-19, the shutdown of the Shanghai factory, and the production halt at the California Fremont factory. Analysts commonly agree that without the COVID-19 related shutdowns, Tesla would have recorded total deliveries of 95,528 units.

With the Fremont factory, which has been shut down since last month, expected to remain inactive until June, achieving this year's vehicle delivery target seems difficult. Earlier in January, Tesla set its annual delivery target for this year at 500,000 units.

Joseph O'Sha, a researcher at JMP Securities, forecasted, "Tesla will record deliveries of 433,000 units this year," adding, "However, it will get back on track in 2021."

This content was produced with the assistance of AI translation services.