Tesla stock leaps after unexpected profit
There were plenty of reasons to expect Tesla to show a loss in the first quarter of 2020. The quarter began with the expiration of the federal electric vehicle tax credit—at least for Tesla customers. It ended with the fast-spreading coronavirus pandemic forcing lockdowns around the world. That dampened consumer demand for cars and forced Tesla to shut down its Fremont factory late in the quarter.
Despite all of those challenges, Tesla says it made a small $16 million profit during the quarter. And that’s on a GAAP basis, leaving little room for accounting trickery. Investors responded by bidding Tesla’s stock up almost 10 percent in after-hours trading. One share is now worth around $875, the highest value since February.
It was Tesla’s third-straight profitable quarter. Tesla says it’s also the first time the company has earned a profit in the first quarter, traditionally a weak quarter for the carmaker.