Coronavirus has not damped Elon Musk’s investment bullishness © REUTERS

Elon Musk has added coronavirus-wary governments to Thai-based cavers and the SEC in his burn book. During an earnings call with investors on Wednesday the Tesla chief executive dubbed lockdowns “fascist” and called for “goddamn freedom”. Moments later the call went quiet. Tesla blamed accidental disconnection. 

Still, Tesla investors didn’t get where they are today by allowing Mr Musk’s outbursts to spook them. Shares rose 11 per cent in after-hours trading. While wider markets have crashed, the US electric car maker’s share price has doubled so far this year. 

This rise is being driven by increased demand and profitability. First quarter sales were impressive — up almost a third to nearly $6bn. Zoom out and the rise looks even more dramatic. Tesla has nearly doubled first quarter sales in the past two years. In delivering close to 88,500 units it trumped expectations.

Bar chart showing Tesla Net income v Free cash flow (Lex)

Zoom in, and much-vaunted profits Tesla look less remarkable. The $16m of net income was undoubtedly helped by efficient scaling up of operations. But it also got a boost from Tesla’s $354m sale of carbon emissions credits to other carmakers — up from $216m a year ago. 

Chart showing net Income excluding regulatory credits for automotives

Free cash flow of minus $895m is more noteworthy. Dreams of self-funding are still out of range. Coronavirus has not damped Mr Musk’s investment bullishness and the plan is to keep the “pedal to the metal”. Yet if the slowdown hits deliveries and demand in coming quarters, outflows will surely increase. Tesla bumped its cash position above $8bn by selling over $2bn of shares in February. It may need to raise more capital before the year is out. 

Chart showing number of mentions of ‘profit’ during Tesla earnings calls

Much depends on the economy. No wonder Mr Musk is so exercised. Calling coronavirus fears “dumb” in early March, he kept Tesla’s main plant in Fremont, California open until ordered to close it. His noisy opposition to lockdowns has gained attention. But the entrepreneur’s record shows he is no epidemiologist. Mr Musk predicted that by now the US would have no new coronavirus infections. Recorded daily cases across the country remain close to 27,000.

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