Tesla has released its Q1 2020 update and it’s filled with unexpected good news. Unexpected, because a global pandemic has temporarily shut all of its factories down, starting with the one in Shanghai, yet Tesla survived and even prospered. Many thought Tesla would be reporting losses in its first quarter of 2020. Instead, Tesla has reported a $1.8 billion increase in its cash and cash equivalents, which raised that total in the first quarter to $8.1 billion. Tesla had a $283 million GAAP operating income, $16 million GAAP net income, and $227 million non-GAAP net income in Q1.
“Q1 2020 was the first time in our history that we achieved a positive GAAP net income in the seasonally weak first quarter. Despite global operational challenges, we were able to achieve our best first quarter for both production and deliveries” —Tesla
This is one of those things that many people cheer for — doing the impossible. The first quarter of every year is usually the hardest, and when you throw in a global pandemic that shuts the entire world down for a month or two, many can go bankrupt. Instead, Tesla reported profits and its best first quarter ever, with a positive GAAP net income. At Tesla’s Gigafactory Shanghai, the gross margin is approaching the levels of US-made Model 3 vehicles. The Model Y also contributed profits and Tesla noted that this was the “first time in our history that a new product has been profitable in its first quarter.”
Tesla may have been impacted by the global pandemic and also affected by expiring EV incentives, but instead the company said it was planning for its strongest quarter of deliveries in history until all of their operations were interrupted in March. Tesla is confident about growing its global production capacity as fast as possible.
Other highlights from the Tesla Q1 2020 update include that Model Y deliveries began well ahead of schedule. The range in the Model S was increased to 391 miles with no increase in battery capacity.
Model Y & Semi
Tesla expects that the production of the Model Y in Fremont and the Model 3 in Shanghai will continue to ramp up gradually through the second quarter. At Gigafactory Berlin and Gigafactory Shanghai, Tesla is building capacity for Model Y and remains on track to start deliveries from both locations next year. Also, Tesla hopes to start its deliveries of the Semi in 2021.
Other good news includes that Megapack, Tesla’s battery pack of up to 3 MWh which is preassembled at Gigafactory Nevada, is gaining traction. The demand is actually above Tesla’s capacity for producing the Megapacks. The interest in utility-level storage is mostly driven by progress reducing costs. Tesla has also seen an increase in cross-selling within the energy business. More than 40% of Tesla’s residential solar customers get at least one Powerwall. Tesla also installed its 100,000th Powerwall in Q1.
Tesla announced that in its first quarter of 2020 Gigafactory New York hit a very important milestone. In one week, Solar Roof production exceeded 4MW enough for up to 1,000 homes. Tesla will continue to onboard new installers to synchronize its ability to both produce and install Solar Roofs. Tesla also reports that feedback from Solar Roof owners has been very positive.
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