Tesla posts its third quarterly profit, Elon Musk calls lockdowns ‘fascist’

Elon Musk

Tesla Inc’s CEO Elon Musk on Wednesday called sweeping U.S. stay-at-home restrictions imposed for reducing the spread of the coronavirus outbreak as “fascist” as the electric automaker posted its third quarterly profit in a row.

These comments might have overshadowed an otherwise successful quarter that took many investors by surprise as automaker’s rivals have been hit by a slump in consumer demand and forced factory shutdowns.

Shares of the company increased 8.8% at $871 in extended trade.

Tesla’s profitable quarter comes one day after Ford Motor reported a $2 billion first-quarter loss and predicted loss of another $5 billion in the current quarter as the coronavirus hits demand.

General Motors on Monday suspended its dividend and share buybacks and will report earnings May 6.

How Tesla fares in the present quarter and the rest of the year will be an important test of the company’s durability. If the automaker can limit its losses, or even continue its profit streak and outperform other automakers, it will be in a stronger position to take sales from competing automakers weakened by the coronavirus disruption.

Tesla produces a fraction of the automobiles of its competitors but has a much larger stock market value on expectations of significant growth.

On the major disruptions to Tesla has been the government-ordered shutdown of its plant in Fremont, California, which remains idle since March 24 with stay-at-home orders on place until at least May 31.

On a conference call on Wednesday, Musk stated he did not know when Tesla could restart production in California and referred to the state stay-at-home order as a “serious risk” to the business.

Musk said: “To say that they cannot leave their house and they will be arrested if they do, this is fascist. This is not democratic, this is not freedom. Give people back their goddamn freedom!”

Late on Wednesday, Musk doubled down on his stance, in response to a journalist’s tweet that quoted Musk’s comments of calling the stay-at-home orders fascist. “Hell yeah!!”, Musk wrote on Twitter.

Musk tweeted earlier on March 6 that “the coronavirus panic is dumb” but later offered to provide hospitals with free ventilators.

Musk downplayed the coronavirus in March when he said that the pandemic is not even “the top 100 health risks in the United States”, and that car crashes are more dangerous than coronavirus.

Tesla stated it could not predict how sooner vehicle manufacturing and global supply chains will normalize, saying it would get back to the full-year guidance for net income and cash flow once it reports current-quarter results in three months.

Musk stated that while other automakers were cutting back, Telsa was increasing investment. He said Tesla might announce the location of a new American factory in one to three months.

Tesla on Wednesday stated it expected production at its vehicle factories in Fremont, California and in Shanghai, China to increase gradually through the second quarter.

The company said operations at its Shanghai plant were doing better than expected, with production rates of its Model 3 sedan expected to hit 4,000 units per week, or 200,000 annually, by mid-2020.

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