Tesla is expected to continue its profitability in Q2 2020 and is poised to officially join the S&P 500 Index. Due to the impact of the COVID-19 pandemic, Wall Street analysts previously believed that Tesla’s Q2 delivery performance would be difficult to achieve. On June 30th, Tesla sent an email to all employees urging them to “go all out” to produce and deliver cars to maintain profitability in Q2. On July 1st, according to CNBC, Musk sent another congratulatory email to all internal employees before announcing the Q2 delivery numbers publicly. In order to join the S&P 500 Index, Tesla must also achieve profitability in Q2 of this year, hence the email mobilizing employees. Based on leaked emails, Musk seems to be in a good mood and Tesla is likely to achieve profitability in Q2 2020. As of July 1st, Wall Street expects Tesla to deliver 72,000 electric cars in Q2 of this year (analyst forecasts vary widely, with delivery ranging from 39,000 to 86,000). Recently, as the COVID-19 pandemic in the United States began to ease, all Tesla factories have resumed production. In order to revitalize the demand for electric vehicles in North America, Tesla has reduced the prices of electric cars in North America by 6% during Q2, and adjusted prices in China. After government subsidies, the latest price of the Model 3 is about 270,000 yuan, further enhancing its appeal to consumers.
Note:
The S&P 500 Index, short for the Standard & Poor’s 500 Index, is a stock index that tracks the performance of 500 publicly traded companies in the United States. It is created and maintained by Standard & Poor’s, a global financial analysis institution. The S&P 500 Index covers all companies listed on major US stock exchanges. Because it includes so many companies, its index value is very accurate and has good continuity, reflecting very broad market changes, thus making it widely regarded as an ideal target for stock index futures contracts and also becoming the benchmark for US investment portfolio indexes. The most important condition to join the S&P 500 Index is that a company must achieve continuous profitability for four consecutive quarters.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.