Tesla has notched four straight quarters of profit for the first time, a breakthrough for the electric car maker that puts it on course for inclusion in America’s blue-chip index and could further boost demand for its soaring shares.
Elon Musk’s company said it made a profit of $104m (£82m) in the three months to the end of June as it sold more of its cheaper Model 3 and Model Y cars, despite a production shutdown at its California plant that lasted for several weeks.
Four consecutive quarters of profitability makes Tesla, now the world’s most valuable car company, eligible for a place in the S&P 500, the index of America’s biggest companies. The billions invested in funds that track the index is likely to underpin demand for Tesla’s shares, which have already more than tripled this year.
Tesla’s entry into the index will still have to be approved, but the string of profits is a key milestone following years of questions over whether the company can make money and follow through on its plan to bring electric cars into the mainstream.
Speaking to financial analysts after the results, Mr Musk unveiled plans to open a new factory near Austin, Texas. He said the new location, which follows a beauty parade of the American South, would be “an ecological paradise, with birds in the trees, butterflies, fish in the stream”. The factory will produce the company’s upcoming Cybertruck.
He hinted that the company was planning to make a smaller car at some point in the future and that he wanted to bring down the cost of his vehicles. “It’s reasonable to assume that we would make a compact vehicle of some kind, probably a higher capacity faster vehicle of some kind,” he said. “The thing that bugs me the most about where we are right now is that our cars are not affordable enough. We need to fix that.”
This month, Tesla overtook Toyota to become the world’s most valuable carmaker, and it has risen by another 40pc since then. On Wednesday night, shares rose by 7pc as Tesla forecast that its profit margins would “continue to grow over time, ultimately reaching industry-leading levels”.