The electric car manufacturer Tesla posted its fourth-consecutive quarter of profit on Wednesday, the first time the company has hit that milestone in its 17-year history.
Tesla’s success comes amid a global pandemic that has generally tanked economic activity across the world, surprising many Wall Street analysts and causing CEO Elon Musk’s net worth to skyrocket along with the car company’s stock price, according to The Wall Street Journal. With its fourth-consecutive quarterly profit, Tesla’s stock has overcome a key hurdle and is eligible to be listed on the S&P 500.
“A roadway into the S&P 500 is kind of ordaining Tesla a real company and that always wasn’t the case,” Loup Ventures managing partner Gene Munster said. “That’s why it’s a historic day.”
Tesla CEO Elon Musk’s net worth has rocketed up in the past few weeks along with the car company’s stock price, which has nearly quadrupled over the past year. On Friday, Musk’s net worth jumped over $6 billion in one day because of Tesla’s stock valuation, and his net worth has risen over $40 billion in the past year. Amazon owner and CEO Jeff Bezos is the only person in the world who has increased his net worth over the past year more than Musk, according to the Bloomberg Billionaire Index.
In his Q2 earnings call with investors on Tuesday, Musk announced that Tesla would be building its second U.S. assembly plant near Austin, Texas. The plant, once up and running, will produce two types of trucks, a pickup and a semi. The plant will also manufacture Model 3s and Model Ys.
Musk plans to go on a hiring binge to staff the plant, a rare occurrence as hundreds of thousands of Americans continue to file for unemployment every week, according to WSJ. The new plant is expected to increase Tesla’s manufacturing capacity by about another 2 million vehicles per year.
Musk’s decision to build a plant in Texas comes after he sued local health officials in California after the government shut down Tesla’s factory for several weeks amid the coronavirus pandemic. At the time, Musk threatened to leave the state entirely and move elsewhere.
Officials in California’s Alameda County eventually acquiesced to Musk’s demand and allowed him to reopen the factory as long as proper safety precautions were taken to limit the spread of the virus within the facility.
Tesla is also building a factory outside of Berlin to increase production alongside its factory in Fremont, California, and a factory in China. Some experts have questioned whether Tesla’s stock price is overvalued and destined to crash because of a lack of demand for Tesla’s vehicles. Musk has denied such claims and asserted that demand is not a problem for the car company.
Tesla’s most pressing issue, according to Musk, is battery supply. To solve the problem, Tesla is developing a new line of Model 3s that will use a different type of battery with less range.