Tesla’s vehicle deliveries increase

Tesla posted its second quarterly profit in a row as vehicle deliveries hit a record and the company said it would comfortably make more than half a million units this year, pushing its shares to new highs.

The delivery forecast, higher by more than a third than last year’s production, suggests Tesla is looking at a steadier chapter after years of steep losses, production troubles and clashes between chief executive Elon Musk and US regulators.

The electric carmaker’s stock, which has nearly doubled in the past year, jumped 13% after hours on Wednesday, cracking the $600 mark for the first time.

Tesla said that the manufacturing process at its new Shanghai factory, which started delivering Model 3 sedans a month ago, was running as expected and that it would increase production of the mass-market cars because of strong demand in China.

The $2 billion Shanghai factory is key to Tesla’s growth strategy. There it aims to produce 150,000 Model 3 sedans and later increase output to 250,000 a year, including the Model Y.

But the company warned of a 1-1.5 week delay in the ramp of Shanghai-built Model 3 cars because China ordered a shutdown of the factory after a new coronavirus breakout that has killed 170 people and infected thousands.

“This may slightly impact profitability for the quarter but is limited as the profit contribution from Model 3 Shanghai remains in the early stages,” Tesla’s chief financial officer Zachary Kirkhorn said on a post-earnings call. The company is evaluating whether it will be hurt by the virus and whether the supply chain for cars built in its Fremont, California plant will be affected, he said.

Tesla said it started production of the new electric crossover utility vehicle Model Y at the Fremont factory this month and plans to deliver the first cars by the end of March, ahead of schedule.

Reuters