Tesla's Elon Musk calling coronavirus lockdowns 'fascist' overshadows profitable quarter

Saturday, 02 May, 2020

The rosy earnings and production numbers come as Tesla's chief executive, Elon Musk, has been vocally protesting the ongoing US coronavirus lockdowns.

Canaccord Genuity said the strong gross margin at 20.6 percent was proof of "a meaningful operational improvement that the company has made over the past several quarters".

"Forcibly imprisoning people in their homes is against all their constitutional rights", Musk said.

The stay-home order may force Tesla to dial back its forecast to produce more than 500,000 vehicles in 2020.

Those options are now worth about US$890 million, based on their exercise price and Tesla's stock price of US$871 in Wednesday extended trading.

"I should say, it will still make sense to buy FSD as an option as in our view, buying FSD is an investment in the future", Musk said during the earnings call.

Tesla scored large increases in both vehicle production and deliveries and reported progress in ramping up production at its Fremont, California factory and at a newly opened plant in Shanghai. Six Bay Area counties jointly extended shelter-in-place orders affecting San Francisco, Fremont, and other cities through May 31, with only a few minor restrictions.

The electric automaker reported earnings per share of $1.24, while the Street had been expecting a loss of 36 cents per share. It also moved deliveries of its new electric semi from this year to next.

Tesla earlier this month said that it delivered 88,400 vehicles in the quarter, beating analyst expectations by almost 9,000 cars.

"Dear Elon, I guess the offer of a factory tour was never serious", Einhorn, a long-time Tesla bull and short-seller, tweeted Thursday . "At Gigifactory Shanghai, further volume growth resulted in a material improvement in margins of locally made Model 3 vehicles".

He fought against Californian stay-at-home orders, arguing the Tesla plant was an essential business, while leaked emails asking for workers to return to the plant this week have seen that plan shelved, while suggesting there would be no more cases of COVID-19 in the United States by the end of April.

"We are a bit anxious about not being able to resume production in the Bay area, and that should be identified as a serious risk", Musk told an analyst.

One example of Tesla's improved production is on the Model 3, which shares around 80 percent of its components with the Model Y crossover.

But the company closed the Fremont plant in late March, following a standoff between Musk and state officials. "Its Shanghai factory was up and running, Model Y production and deliveries were ahead of schedule, and the company was making money while expanding its product lineup and operations".

Musk, who has often made outspoken and even inflammatory comments on conference calls and on Twitter, said in comments to analysts on Tesla Inc's earnings call that it was "fascist" to say people can not leave their homes.