Elon Musks Tesla announces 2020 as its first profitable year with $721 million earnings

Tesla
Motors on Wednesday announced its first annual profit following a big jump in
auto deliveries. They also indicated confidence for more growth in 2021 despite
the disruption of the COVID-19. The company even rose on Wall Street last
year, according to AFP.

Elon Musk’s
electric car company is also coming ahead with new plants in Germany and Texas
that are awaiting to start production in 2021, following the profit from extended
production at factories in California and China.

Tesla has reported profits of $721 million in 2020,
compared with a loss of $862 million in 2019, reported AFP.

“This past year was transformative for Tesla. Despite
unforeseen global challenges, we outpaced many trends seen elsewhere in the
industry as we significantly increased volumes, profitability and cash
generation,” the company said in its earnings report.

Revenues jumped 28% to $31.5 billion
following a 36% increase in auto deliveries to just under 500,000 in
2020. In the fourth quarter, the company reported profits of $270 million, up
157% from the year-ago period on a 46% rise in revenues to $10.7
billion.

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That translated into profits of 80 cents per share, below the $1.01
projected by analysts. However, the company did not provide elaborated
forecasts for 2021 sales or profit, reported AFP.

In terms of volume, “over a multi-year horizon, we expect to
achieve 50% average growth in vehicle deliveries. In some years we may
grow faster, which we expect to be the case in 2021”, added Tesla in its
report.

Ives also explained the statement on 2021 volumes as suggesting
deliveries of between 750,000 and 800,000, helping Tesla to reach one million
vehicle output in 2022.

The company’s chief financial officer, Zach Kirkhorn, told that Tesla
had been impacted by a shortage in semiconductors that has also affected other
automakers, but mentioned the effect as temporary.

CFRA Research analyst Garrett Nelson said the policies by
President Joe Biden’s administration of favouring electric cars “should
prove to be a potent tailwind” for the company.

Now, Musk is in contention for world’s wealthiest person as shares of Tesla
stand more than seven times their value from a year ago. Forbes’ on Wednesday,
ranked Musk second in “real-time” billionaire’s list followed by Amazon
chief Jeff Bezos but just ahead of LVMH chief Bernard Arnault.