Tesla seems to have no upper limit: Q2 results
Tesla has just reported a profitable Q2, which also marks four consecutive quarters of profit.
Damn, that's impressive. Any car company that can remain profitable in Q2 '20 is doing spectacularly well.
However, the far more interesting bit is why:
Automotive revenue declined by 4% year-over-year for Tesla from $5.38 billion to $5.18 billion, despite the company adding a new crossover SUV to its lineup, the #ModelY, and opening a new plant in #Shanghai in the past year.
In the year-ago quarter, Tesla reported $111.2 million in revenue from regulatory credits. That number nearly tripled to $428 million in regulatory credits in the second quarter of 2020.
$300m increase in regulatory credits sure goes a long way to helping profitability, and congratulations to them for making the most of this opportunity. Long term they can't rely on it, but it sure helps fund more R&D and production capacity in the meantime.
Given that this doesn't explain all the revenue increase, I expect that the rapid growth in grid side battery deployment also has helped significantly. With Semi, Cybertruck and 2 new factories still coming, guess it only gets better from here!.
Having said that, Tesla stock isn't the only game in town for EV stock investors anymore. Tesla 's China rival NIO went public in 2018 and has more than tripled this year. EV makers Fisker and Hyliion will soon be public via mergers with blank check companies.
Nikola took a similar route this year. And electric van maker Workhorse invested in Lordstown Motors, an EV startup eyeing a potential blank check deal as it prepares to debut an electric pickup by end of year."
One area to be careful of as we move into NewMobility: If one company, Tesla, can make it as a start up OEM, it doesn't mean that all of the hundreds behind it will also make it. Starting an EV OEM has become trendy, and it seems that anyone who is handy with the crayons and some BS can start asking for $5000 deposits and do an IPO.
While a revolution such as New Mobility is the time to do it, we should remember Tesla is the only #OEM startup to actually sell volume (1m+) in the last 40 years.
In fact, starting an OEM is almost a glamor thing, for both startup investors and founders. Perhaps the real, long lasting opportunities for both lay a layer or two down - infrastructure, tech suppliers, energy, EVSE, sales, marketing, fleet, platforms,mapping - the companies that generate real profits off the EV revolution.
Having said that,
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