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Tesla CEO Elon Musk launched into a mini-tirade about government stay-at-home orders during the coronavirus pandemic, calling them "fascist" and "an outrage" on an earnings call Wednesday.
What he said: [T]he extension of the shelter-in-place or, frankly, I would call it, forcibly imprisoning people in their homes against all their constitutional rights — in my opinion — breaking people's freedoms in ways that are horrible and wrong and not why people came to America or built this country What the f--k?"
- "Excuse me. Outrage. It's an outrage. It will cause great harm, not just to Tesla, but to many companies. And while Tesla will weather the storm. there are many small companies that will not. Everything people worked for their entire life are being destroyed in real time."
- "They should be allowed to stay in the house, and they should not be compelled to leave. But 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."
The big picture: Tesla posted its third straight quarterly profit, on strong sales of its Model 3 and Y, but said business disruptions caused by the coronavirus pandemic were clouding its outlook for the rest of the year.
Why it matters: It's difficult for any company to forecast the future at this moment, but having raised $2.3 billion in February, Tesla said it has enough liquidity to keep investing in future products and long-term factory expansion.
- That could give Tesla extra momentum when the crisis finally passes.
Yes, but: There are many uncertainties, and Tesla's success will depend, to a large extent, on factors outside of its control.
- The most important is the reopening of its Fremont, California, assembly plant, where Model Y production had recently begun alongside Model 3. It is currently idled because of a Bay Area stay-at-home order.
- Tesla's new Shanghai factory has resumed production after coronavirus disruptions in China, and a new factory is planned for Germany.
- Tesla said it would delay its Semi truck until 2021. There's no word yet on the fate of its electric Cybertruck pickup.
What they're saying: The timing of the coronavirus couldn’t have been worse for Tesla, as it was launching Model Y and ramping production in China, said Karl Brauer, executive publisher at Kelley Blue Book.
- Yes, but: "As brands go, Tesla's is one of the strongest in the automotive industry. And that kind of brand equity is a company’s best defense during economic turmoil," Brauer added.
By the numbers: Tesla's first quarter was better than analysts had expected.
- The company eked out a $16 million net profit in the first quarter on $5.1 billion in revenue.
- Its $283 million pre-tax operating income represented a 4.7% operating margin.
- The company was on track for its strongest quarterly deliveries before the pandemic, so it remains confident after production resumes.
- "At the same time, we are diligently managing working capital, reducing noncritical spend, and driving productivity improvements. We believe we are well-positioned to manage near-term uncertainty while achieving our long-term plans," Tesla said.