Tesla warns of shutdown as Musk calls for end of lock

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Tesla factories

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Tesla’s demand for electric cars continued for the first three months of the year, despite the upheavals caused by the coronavirus pandemic.

Quarterly revenues jumped 30% from last year to $ 5.9 billion (£ 4.7 billion), which enabled the company to make a small profit from $ 16 million.

This is the company’s third consecutive quarterly profit, marking a turnaround after years of losses.

But Tesla said that the forced closings and delivery limits have clouded its forecast for the coming months.

“Frankly, I would call that forcibly imprisoning people in their homes against all of their constitutional rights … that’s my opinion,” Tesla boss Elon Musk, who opposed the foreclosure measures, told investors Wednesday.

“This will cause great harm, not only to Tesla but to many companies. While Tesla will weather the storm, many small businesses will not.

“And all the people – everything they worked their whole lives was destroyed in real time.

“We are going to have and have many suppliers going through very difficult times, especially the small ones, and this is causing a lot of conflict for a lot of people. “

He added that Tesla was “a little worried about being unable to resume production in the Bay Area,” and said it should be considered “a key risk” because the company has only two car factories – one in Shanghai and one in Fremont, California.

Musk said he didn’t mind if people wanted to stay at home, but was concerned that people would be forced to lose their livelihoods as the foreclosure continued.

Musk had resisted the shutdown of Tesla’s main auto plant, located in California, pending several days after the state set up a shelter there in March to officially halt production.

More recently, he celebrated his intention to relax freeze orders, writing on Twitter “FREE AMERICA NOW” on Wednesday morning. He previously dismissed concerns about the coronavirus as “stupid.”

Uncertain orientation

Tesla said it still has the capacity to deliver more than 500,000 cars this year, despite the announced closings. But he warned that this could change because the reopening dates are unclear.

“It is difficult to predict how quickly vehicle manufacturing and its global supply chain will return to previous levels,” said the firm.

“Because of the wide range of potential outcomes, the short-term directions … would likely be inaccurate.

“For our US factories, the speed at which we and our suppliers can accelerate production after resumption of operations remains uncertain. We coordinate closely with each supplier and the associated government. “

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Tesla’s performance comes after car sales have fallen. Ford previously announced a loss of $ 2 billion in the first quarter and warned investors that it expected another $ 5 billion hit in the April-June period.

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Nicholas Hyett, equity analyst at Hargreaves Lansdown, thinks it’s not surprising that Tesla is withdrawing its guidelines, given the economic risks ahead.

“If the world slips into a potentially dramatic economic downturn, the demand for big ticket items is likely to drop and we would be very surprised if Tesla got away with it,” he said.

“Given that the group has only recently achieved sufficient scale to be sustainable, it would be far from ideal. “

Mr. Musk’s commentary on the virus, which also included the promotion of unproven drugs, caused an uproar.

He also brought back memories of the controversies he sparked using the social media platform two years ago when he laid several charges against a British cave diver following a rescue operation in Thailand.

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