Technology News - 249th Edition

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Tesla's stock soars after company posts surprising 3Q profit
Whenever someone thinks about a car from the future they have probably one company in mind and that would have it be Tesla. Tesla is one of the companies that pushes the limits of what is fiction and what is science-fiction. This can be due to several reasons and maybe it is a combination of all of these reasons, but one thing's for sure, it is that Tesla is dominating the car industry in the twenty first century. Elon Musk, the eccentric, controversial, but nonetheless revolutionary billionaire and engineer is at the front of the battle that is the automotive industry. One can argue that if Tesla didn’t have Elon Musk than it wouldn’t be at the level it is at. Tesla actually started out by the influence of another automotive company; in the early 2000s’ GM, or General Motors, was recalling all its electric cars and the founder of Tesla decided to start a company based on just that idea. Tesla was at one point not the average persons’ affordable car, its first car that was accessible to the general public was called the Tesla Roadster, which was originally released in 2008 and was last produced in 2012 before being switched to other electric cars. Even when the Roadster was being developed, Musk was already an integral part of the development and engineering team. Not only this, Elon Musk also was one of the early investors into the company and directed how the financial aspect would flow by joining the board of directors. However, that doesn’t mean Tesla had an easy start to becoming one of the major giants in the automotive industry. Some of the issues came with the financial side of the business; things like new technology, funding resources, and having sales issue didn’t help at the beginning -and even now- for Tesla. Other issues that had impacted Tesla is that it's the “new kid” on the block. Mostly every other car manufacturers like: Ford, GM, and Nissan all focus on gasoline cars. Although these companies had some cars like the EV1 by Ford, it was really a niche car and wasn’t actually meant to be taken seriously. It wasn’t until Tesla came around that electric cars were taken seriously by customers and competition alike. So, Tesla has started to focus primarily on electric cars and make that its market. Other companies like the startup in China called Nio, has tried to compete with Tesla but have not kept up with the Tesla’s speed.

That being said, even in the quarter of 2019 Tesla was not anticipated to make a profit. Before this quarter Tesla has mostly reported loses and had to be bailed out multiple times by investors and public fundraising. So it was no surprise that analysts were expecting it to generate more loss in the 2019 third quarter. However Tesla made a surprising turn around made a profit of around $143 million dollars. This is actually great news because a few months back Elon Musk started that they are at serious risk of bankruptcy. Another great news that came out of this 2019 third quarter for Tesla is the stock prices. The stocks rose like a high tide and rose a 52 week high. According to an article on AP News, Tesla lost around 1.1 billion dollars in the first two quarters of 2019; this directly correlated to stocks dropping extremely drastically, around 23 percent. This report of Q3 2019 helped recover majority of that 23 percent loss and it recovered to around $309 with a recovery percentage of 20. Analysts are still suspicious of its future because of how unstable Tesla seems, but if these quarter three numbers are any real than it has a great future.

Another thing that should be taken into account is that Tesla is not wanting to stay in the automotive industry; it is wanting to branch out into homes and other industries. An article in Electrek, quoted that Elon Musk thinks that Tesla energy will become a global utility and might even be bigger than its car industry; however, if this becomes a reality or is all just big talk is still to see.

Overall, Tesla is heading into the right direction with its corporation and leading engineer at the front of the battle. They are also thinking about the issue that might affect humans in the future and the plant. Other companies might have to start taking this company more seriously and adjust accordingly or they will be left in the dust.

Sources

AP News

Electrek

Ars Technica

Written by: Eternity
Date: October 24th, 2019