Tesla paid only HALF of its $ 700.00 a month rental in New York City, despite a 281% increase in earnings
Tesla paid only half the rent of $ 700,000 a month in one of its New York showrooms, a new report claims just one day after the electric car maker posted a 281 percent profit increase in the second quarter.
Insiders said Fox Business that eccentric Tesla founder and CEO Elon Musk has been working on delaying rent payments at many of his 80 showrooms in the United States during the coronavirus pandemic.
At least one of the New York showrooms declined to suspend the lease, the sources said, so instead the company paid only half of the full $ 2,800,000 it owed over the past four months.
Musk – who became the fifth richest person in the world this week as his fortunes rose to $ 74 billion according to Forbes, reportedly pledging to pay off debt in August, handy after Tesla earned revenues in the second quarter making it eligible came to enter the S&P 500.
Tesla CEO Elon Musk (pictured) reportedly attempted to postpone rental payments in many of his 80 showrooms in the United States during the coronavirus pandemic
Tesla has only paid half the rent of $ 700,000 per month in one of its New York showrooms since March, insiders say. Tesla’s showroom in the Meatpacking District of Manhattan is shown
The sources have not disclosed which of the seven showrooms in New York has not paid Tesla in full.
Given the high price tag, the showroom in question may be the first and only Tesla to open in Manhattan in 2017 – located at 860 Washington Street in the heart of the coveted Meatpacking District, right next to the High Line.
Lease brokers at the Washington Street location did not immediately respond to DailyMail.com’s request for comment.
Tesla’s other New York showrooms are located in Brooklyn, Henrietta, Huntington Station, Manhasset, Mt Kisco and White Plains.
DailyMail.com has approached the headquarters of the automaker and Musk for comments on the alleged attempts to postpone renting in showrooms across the country.
The claims sparked speculation that Tesla could have tried to delay payments in an attempt to increase second-quarter earnings.
The sources have not disclosed in which of the seven showrooms in New York Tesla did not pay the rent in full. Given the high price tag, the showroom in question may be the first and only Tesla to open in Manhattan in 2017 – located on 860 Washington Street in the heart of the coveted Meatpacking District right next to the High Line (photo)
The automaker delivered a net result of $ 104 million on Wednesday, or $ 0.50 per share in the second quarter, as cost reductions and strong deliveries helped offset coronavirus-related factory shutdowns.
It was the first time Tesla had made four consecutive quarters of profit, removing an obstacle that could lead to inclusion in the S&P 500 index.
The performance is a major achievement for Musk, whose mission to lead the global auto industry to an electric future has often been questioned by investors questioning Tesla’s viability.
Shares of Tesla, which gained more than 500 percent in the past year, rose another 4.4 percent in after hours trading on Wednesday.
Many analysts believe that the rally has been fueled in part by the expectation that Tesla will soon enter the stock index of the largest US companies, which would cause huge demand for shares.
Speaking to investors on a conference call, Musk said on Wednesday that Tesla would prioritize growth over profit in the future and focus on making its vehicles more affordable.
“What bothers me most at the moment is that our cars aren’t affordable enough, we have to fix that,” said Musk.
“I think we just want to be a little profitable and maximize growth and make the cars as affordable as possible.”
The price of a Model 3 sedan, the most popular vehicle, starts in the United States at $ 37,990.
Tesla posted a net result of $ 104 million in the second quarter on Wednesday, which is the first time the electric vehicle maker has made gains for four consecutive quarters and clears an obstacle that could lead to inclusion in the S&P 500 index
Musk also announced that Travis County, Texas, including Austin, would be the location of Tesla’s new plant. The area competed with Tulsa, Oklahoma for the new plant, which promises to create at least 5,000 jobs.
Musk said the factory would produce Model 3 and Model Y vehicles for the eastern United States, as well as a new semi-truck called the Tesla Semi and the automaker’s futuristic Cyber Truck.
Tesla confirmed on Wednesday its goal to deliver at least half a million vehicles by the end of 2020 despite production interruptions, including the shutdown of the California plant for nearly six weeks of the quarter on behalf of local authorities.
The company delivered more than 90,000 vehicles in the second quarter, exceeding analyst expectations.
“While achieving this goal has become more difficult, delivering half a million vehicles by 2020 will remain our goal,” the company said.
At the investor’s call, Musk said the real limitation of Tesla’s growth is battery cell production at an affordable price, saying the company would expand its business with Panasonic Corp and China’s Contemporary Amperex Technology (CATL).
Tesla will introduce new low-cost, long-life batteries in its Model 3 sedan in China later this year or early next year, Reuters previously reported.
Tesla’s second quarter profit was due to cost reductions and strong deliveries that helped offset coronavirus-related factory shutdowns. The company’s flagship factory in Fremont, California has been pictured after reopening in May
Tesla’s second-quarter sales fell to $ 6.04 billion from $ 6.35 billion a year earlier, but exceeded analyst expectations for $ 5.37 billion in revenue, according to IBES data from Refinitiv.
Tesla reported revenues of $ 5.18 billion in second-quarter auto revenues, but the share of regulatory credit revenue – payments it receives from other automakers to offset emissions – increased from $ 424 million in the first quarter to $ 428 million.
That revenue could dry up as more manufacturers develop and sell electric cars, but many rivals are still focused on reaping the high profit margins from fuel-guzzling trucks and SUVs.
“Right now in the EV market, it’s the world of Tesla and everyone is paying the rent, a dynamically displayed front and center this quarter,” Dan Ives, a Wedbush analyst, said in a note.
Tesla’s rapid rise to become the world’s most valuable auto maker could mark the beginning of a new era for the global auto industry, defined by a Silicon Valley approach to software that surpasses old-fashioned manufacturing know-how.
The company said that higher earnings from those regulatory credits combined with temporary wage cuts for employees during the pandemic and $ 48 million in deferred earnings from the unreleased self-driving feature offset factory shutdown costs.
Musk became the fifth richest person in the world this week, as his fortunes rose to $ 74 billion according to Forbes
Musk qualified on Tuesday for a payout of an unprecedented $ 2.1 billion, his second jackpot since May of the electric car maker after the massive inventory surge.
The 49-year-old secured his place as the fifth-richest person in the world on Monday, as his net worth reached $ 74 billion thanks to Tesla’s ongoing stock rally.
Musk’s value has tripled in the course of the coronavirus pandemic. In mid-March, he was ranked number 31 on the Forbes list with assets under just under $ 25 billion.
He is now behind only Facebook founder Mark Zuckerberg, the fourth richest, Microsoft’s Bill Gates on the third, Bernard Arnault on the second, and Bezos, who is the richest man in the world.
Now worth more than General Motors, Ford, BMW and Ferrari combined, Tesla has surpassed every rival to become the world’s most highly regarded automobile manufacturer.
Shares in the company, of which Musk owns 21 percent, reached $ 1,643.00 on Monday – a 300 percent increase since January 2020 and a 60 percent increase since late June.
Asked by Forbes Speaking about his wealth, the outspoken Musk, who is also the CEO of SpaceX, said, “I really don’t care. These numbers are rising and falling, but what really matters is making great products that people love. ‘