The revelation of Tesla's success so far has hiked the stock price to all time highs. Although many headlines have revolved around the company, it's important to take a look at how others are fairing in these unpredictable times
On June 2nd, Tesla published a press release of their second quarter production and delivery numbers between the period of April 1st and June 30th 2020
Although this is normal and routine, this year's second quarter has a particular significance coupled with it
With the Covid disease flaring up all over the place, the world has been forced to 'slam the breaks 'with regard to its economy, growth and enterprise while we wait it out
It's accurate to say that many companies, even the economic titans have experienced a less than favourable impact due to the pandemic
While Tesla on the other hand, is booming!
A Company Untouched
We're strictly talking of Tesla here. The deliveries report was something of a eureka moment for the company and the financial analysts
Just to avoid confusion - the delivery count was able to be above the production count due to most automotive companies over producing in the first quarter in order to have additional stock moving forward, just in case!
The first point of significance is this, you'll notice a comment underneath the figures there which reads:
"While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels."
What they are talking of here is that one of their most important facilities with the highest production power was shut down for 33 days during Q2, this of course had a negative impact on their ability to produce vehicles
Analysts and business heads in the automotive industry had predicted that Tesla would produce roughly somewhere between 50,000 and 72,000 cars during the quarter
Some of these assumptions though were made before anyone really know the impact of covid crisis and certainly before the power-house facility was shut down - yet the most ambitious number 'calculated' clocked in at roughly 20,000 less than actually produced!
Why This is Key?
Tesla has revealed a favourable quality about itself, it's robustness
For any company to hold it together throughout a global economic lock-down is one thing, but for an EV (electric vehicle) company in a massively competitive automotive industry to do this, is substantial
Nevertheless, it's proven the point that Tesla is, and is increasing to become a true might of the automotive industry. Even being able to do so while introducing a product that has been denounced so many times over by those who display pessimism and limited forethought
But this isn't the hidden secret we’re talking about - that's up next
The Hidden Secret
A once in a lifetime opportunity has arisen from the Covid crisis. It's not necessarily apparent by measuring Tesla's performance on its own, but measuring it in contrast to the automotive giants that exist and have existed for decades
This test is one that tells us whether the 'new kid on the block' has a place amongst its economically resilient elders
The measurable variable is...Public Demand!
Because it's not just Tesla who have been at disadvantage here, it's everyone. When we say everyone we aren't just talking about the automotive industry either - but the entire supply line that makes vehicle production possible
Everyone has suffered a handicap, yet one had the ability to shrug it off while those we perceive to be 'giants' ultimately take some of the biggest hits they've ever felt
So knowing just how well Tesla did, how about the big names, Ford, Toyota, BMW, ect?
How did Other Automotive Companies do?
Not great, at all
Other predominantly ICE production ( internal combustion engine ) front runners may be established, however the demand for their vehicles is down, an awful lot!
If we take a comparison of the year to date figures for the end of Q2 2020 we see something interesting
All of the following are true for US vehicle sales only
GM ( General Motors ) from Detriot, Michigan who are known for the Buick, Cadilac, Chevrolet and GMC are down 34% compared to this time last year
Toyota are down 35%
Fiat Chrysler down 39%
BMW down 29%
Ford Motor 23%
Honda Motor 24%
Hyundai Motor 18%
The list goes on, and they are all negative
Tesla though, are up 13.2%
So here reveals the Hidden Secret - Tesla have a significant portion of the automotive market despite having a fraction of the production power like the bigger companies!
More established vehicle providers are experiencing a drop in demand while Tesla ON ITS OWN tends positive, as we've said - this test is one of great significance
Tesla are proving that the growth of the company and the ethos associated with their bigger mission is compatible with the wider physiology of modern day people
Many are concerned for the environment and are willing to pay a higher up front cost for a chance to save the planet and over time.. even save themselves money
We live in a period where environmentally friendly is quickly becoming economically viable and Tesla are rallying the market to broadcast this
The Covid crisis has shown that Tesla is not only a robust company that can weather truly damaging economic hardship
But moreover, it's proven the companies products are in high demand while demand for other products by other companies, fall!
Is this the start of the EV revolution?
We have an exact report on the production and delivery numbers, we now await the revenue and specifically, the profit from these
The Earnings Report is the next publication to look out for. Within will describe how much money was made during Q2
As an added bonus, if Tesla edge a profit this quarter by a measly one dollar, they are eligible to be considered for the S&P 500 index fund! - what a milestone!
Although the report details the sum total of deliveries made, it also includes revenue from software upgrades and other areas Tesla make profit. Looking at the deliveries, the company may have a great shot at a profit margin
This information is to be released late in the month of July (Assumed to be the 22nd)
On from this, the third and fourth quarter are beginning to shine with potential and we're all excited for it!
In conclusion, amidst the scepticism of Elon Musk's unorthodox leadership and ballsy tweets he's really done well to rally the workforce and pull a result out of the bag
What's even more heart-warming, is how Elon thanks his workforce for the immense effort they've put in!
Thanks for reading