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Tesla’s (TSLA) market cap went up to US$224.176 billion yesterday after releasing an impressive Q2 2020 vehicle production and delivery report. Tesla produced a total of 82,272 vehicles and delivered 90,650.
However, even with the share price of $1,208.66—at the market’s close on Thursday—a market cap of US$224.176 billion, and another excellent delivery report, some have wondered if TSLA has succeeded enough to make it into the S&P 500.
For quite some time now, TSLA bulls have said that the company needs at least four consecutive quarters to make it into the S&P 500 index and join the ranks of Apple (AAPL), Microsoft (MSFT), Alphabet Inc. (GOOGL or GOOG, depending on the Class), and Amazon (AMZN). While there are other criteria to get into the S&P 500, it seems the index has focused mainly on a company’s positive GAAP profit over a 12-month period.
“Tesla (ticker: TSLA) has generated about $1.42 in positive GAAP earnings per share over the past three quarters,” noted Barron’s. The publication also stated that analysts expect Tesla to lose $1.58 a share on a GAAP basis in the second quarter. The company’s recently released vehicle production and deliveries report may have changed analyst estimates. After all, many Wall Street analysts were skeptical that Tesla could match or exceed its production and delivery results from Q1 2020.
However, Tesla noted in its latest report, its production and deliveries are only one factor contributing to the company’s financial performance in the quarter. For Tesla, that statement couldn’t be any more accurate. To get a better picture of TSLA’s performance, analysts should also consider its Energy division, basic Autopilot sales, and possibly even Full Self-Driving (FSD) package sales, among other factors.
Tesla Energy hasn’t exactly been dormant all of Q2 2020. In Australia alone, multiple Powerpack installations were reported over the quarter. Very little has been said about Solarglass Roof V3, but some people have reported installations in the East Coast during the second quarter. Whether or not Tesla Energy’s work this quarter will having any bearing on the company’s profits is yet to be seen, but it may be too early to discount it.
As for its software offerings, Tesla lowered the price for basic Autopilot a few days before the quarter ended. It did the same for customers who wanted to upgrade from Enhanced Autopilot to the company’s Full Self-Driving (FSD) package. And that’s only in the United States. Tesla China held its own promotion for FSD.
Tesla has released a few Autopilot features that have FSD counterparts this quarter, such as Traffic Light and Stop Sign Control (Beta) and Proceed On Green Light Without Confirmation. As previously reported by Tesmanian, the new features may be enough for Tesla to recognize some of its FSD revenue in its income statements.
For now, Tesla investors and supporters are hopeful that the company has done enough to be included in the S&P 500. TSLA’s future ultimately depends on the company’s Q2 2020 Earnings Call and the S&P 500 index.
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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Ma. Claribelle Deveza, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.
Ma. Claribelle Deveza holds zero share of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.
About the Author
Ma. Claribelle Deveza
Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.