Tesla achieves significant results despite COVID-19: UK expert
Web Editor:國際日報 International Daily News
U.S. carmaker Tesla should hang onto its current advantages and scale up in order to get their costs down as they see their fifth consecutive quarter of profits despite the COVID-19 pandemic impacting the automobile industry, said a professor at the University of Birmingham.
The American electric carmaker posted net income of just over 330 million U.S. dollars in the third quarter. The results were boosted by an increase in vehicle deliveries and the sale of environmental credits.
Professor David Bailey said many car companies have been really hit hard by the pandemic. The forecast globally for the car industry this year is for sales to be down 20 percent. However, Tesla has delivered more cars, its revenue is up and its profits are up, and its free cash flow has also increased during this period.
There are many competitors in the automotive world and Bailey said Tesla will be successful in changing how the world is ran because of some advantages it has.
"They do have some competitive advantages, they make a lot of their batteries, so they therefore have a big cost advantage. They're constantly improving their software so their cars actually improve over time, and they have their own supercharger network, which makes it attractive to buy. So they've got to hang onto those advantages and at the same time scale up in order to get their costs down. So there's no guarantee they'll survive. But they've done a pretty good job recently," said Bailey.
Bailey predicts that soon there will be more reasons to buy an electric car than ones with internal combustion engines.
"Here in the UK, actually even with the existing mix, electric cars are cleaner in terms of CO2 emissions and as the world goes more into sustainable energies, things like solar and wind power. Frankly, it's a no-brainer. So we are going electric and there is a report out today and UBS saying that by 2024 electric cars will be the same cost to make as internal combustion engine, there isn't really gonna be much reason to buy an internal combustion engine after 2025," he said.