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Elon Musk says Tesla (TSLA) could break even in Q2 despite global pandemic

Elon Musk rallied the troops at Tesla with only two days left in the quarter. The CEO says that the company could break even in Q2 despite the global pandemic.

Last week, Electrek reported that Tesla could surprise with strong deliveries in the second quarter despite the factory shutdown and slow first half of the quarter due to the global pandemic and restrictions put in place to slow down the spread.

Now we have obtained a new email from CEO Elon Musk claiming that Tesla is close to breaking even in Q2.

In the email titled ‘Down to the last few days’ and sent to employees today, Musk wrote:

Breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory!

Last week, we reported on another more cryptic email in which Musk called for employees to go “all out.”

In that email, the CEO referred to a possible “good outcome,” which now appears to be the possibility of Tesla breaking even in the second quarter.

It would be a major surprise since Wall Street is currently estimating a loss of $1.45 per share during the quarter.

Last year, Tesla turned a profit and Musk said that he believes the company would be able to deliver a profit or break even every quarter going forward aside for any major economic downturn.

The current situation would certainly qualify as a major economic downturn, but the CEO now appears to indicate that Tesla could be resilient enough to break even despite the pandemic.

In comparison, Ford is guiding a loss of $5 billion in the second quarter of 2020.

Electrek’s Take

In my opinion, it is remarkable that it breaking even is even a possibility for Tesla in the current climate, but it’s not done yet.

Again, Elon is talking about the last few days, less than two really, being very important.

As we reported last week, there were 8,000 to 10,000 vehicles in transit and Tesla is having some logistical issues delivering them.

It sounds like Tesla would need to deliver most of those cars by the end of tomorrow in order to break even or possibly turn a small profit.

Since Tesla doesn’t use the franchise dealer model, it owns all its cars until it is handed over to the customers.

Those vehicles in transit represent over $400 million in revenue that Tesla already paid to produce and now needs to recognize by delivering them.

Therefore, I wouldn’t say that it’s in the bag, but even if they come close to breaking even, it would be quite positive.

Tesla employees that are going “all out” during those tough times should be commended for their effort. I hope Tesla do give them their bonuses.

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