Tesla shows surprise profit

SAN FRANCISCO — Tesla reported a surprise first quarter profit on Wednesday on higher car production and deliveries as its chief called for an end to coronavirus restrictions on people's movements due to the coronavirus pandemic.

      While Tesla has gotten back to making electric cars in China, production at its plant in Silicon Valley remains stalled as workers comply with directives to shelter in place to stop the spread of deadly COVID-19.

      Shares surged after the electric car company reported profits of $16 million, compared with a loss of $702 million in the year-ago period. Analysts had anticipated a loss.

      Revenues rose 32 per cent to $6.0 billion, with shares surging some 9 per cent in after-hours trading.

      Tesla scored large increases in both car production and deliveries and reported progress in ramping up production at its Fremont, California factory and at a newly opened plant in Shanghai.

      But the company closed the Fremont plant in late March.

      The Shanghai factory is operational, while Tesla is trying to restart production in Fremont as soon as possible, executives said on the call.

      Tesla had hoped to reopen the factory by May 4, but a joint statement from northern California health officials extended a shelter-in-place order through May.

      Tesla said it has the capacity to exceed 500,000 vehicle deliveries in 2020, but said of the Fremont plant "it remains uncertain how quickly we and our suppliers will be able to ramp up production after resuming operations."

      The company said it was unable to project near-term net income and free cash flow, saying "due to the wide range of potential outcomes, near-term guidance of net income and free cash flow would likely be inaccurate."

      Tesla is making rapid progress lowering production costs in China, and is lowering the price of the standard-range Model 3 car in that country, according to Musk.

      "Although the rest of the world is essentially shutdown and in lockdown mode, strong Model 3 demand out of China remains a ray of light for Tesla in a dark global macro (environment)," Wedbush analyst Dan Ives said in a note to investors.

      "In a brutal environment, these recent numbers were a bright spot for the bulls."

      A new Model Y scored a first at Tesla, being the first of its cars to become profitable in the first quarter after its release, the company reported.

      Musk said a recent update to Tesla self-driving software enables cars to recognise and respond to traffic lights and stop signs as the company continues to envision a future where vehicles safety and efficiently maneuver autonomously, perhaps even as on-call "robo-taxis."

      Despite disruption caused by the pandemic, Tesla will continue to invest in its future, according to its chief.

      "There is clearly an uncertain future ahead, it's a bit of a bumpy road, but I think the long term prospects are extremely good," Musk said.