Tesla last night (22 July) announced a second quarter profit as cost cuts and strong sales helped offset coronavirus-related factory shutdowns, sending its stock up 4.4% in after hours trading and clearing a hurdle which could lead to the electric carmaker’s inclusion in the S&P 500 index.

Reuters reported Tesla booked net income of US$104m from April to June, or $0.50 per share, the first time the electric vehicle maker had posted a profit for four consecutive quarters, a condition for it to be considered for the stock index of the largest US companies.

Tesla second quarter revenue fell to $6.04bn from $6.35bn a year earlier, but surpassed analyst expectations for revenue of $5.37bn, according to IBES data from Refinitiv cited by the news agency.

Tesla reported $5.18bn in Q2 automotive revenue but its share of income from regulatory credits – payments the company receives from other carmakers to offset emissions – increased to $428m from $354m in the first quarter.

The company told Reuters higher income from those regulatory credits in combination with temporary employee salary cuts during the pandemic and $48m in deferred revenue from its yet to be released self driving feature offset the cost of factory shutdowns.

The report noted shares had gained over 500% over the past year while many analysts believe the rally has been fueled in part by expectations of Tesla’s imminent inclusion in the stock index which would unleash a flood of demand for shares.

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Musk on a conference call on Wednesday said Tesla would prioritise growth over profit going forward and focus on making its vehicles more affordable.

“The thing that bugs me most right now is that our cars are not affordable enough, we need to fix that,” Reuters quoted Musk as saying on the call.

“I think we just want to be like slightly profitable and maximise growth and make the cars as affordable as possible.”

The Model 3 sedan, Tesla’s most popular vehicle, lists from US$37,990 in the United States.

Musk also announced Travis County, Texas, which includes Austin, would be the site for Tesla’s new factory, Reuters reported. The area had been competing 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 US, as well as a new semi-truck called the Tesla Semi and the carmaker’s futuristic Cybertruck.

Tesla also on Wednesday affirmed its goal to deliver at least 500,000 vehicles by the end of 2020 despite production interruptions, including the shutting of its California factory for nearly six weeks of the quarter on orders of local authorities related to the COVID-19 pandemic.

The company delivered over 90,000 vehicles in the second quarter, surpassing analyst expectations, Reuters noted.

“While achieving this goal has become more difficult, delivering half a million vehicles in 2020 remains our target,” the company said.

Musk also reportedly said on Wednesday’s call the real limitation to Tesla’s growth was battery cell production at an affordable price, and added the automaker would expand its business with Panasonic and China’s Contemporary Amperex Technology (CATL).

Tesla would introduce new, low cost, long life batteries in its Model 3 sedan in China later this year or early next, Reuters has reported previously.

“Right now in the EV market, it’s Tesla’s world and everyone else is paying rent, a dynamic shown front and centre this quarter,” Dan Ives, a Wedbush analyst, said in a note cited by Reuters.

As reported earlier, Musk on Tuesday qualified for a payout worth an unprecedented $2.1bn, his second jackpot since May following Tesla’s massive stock surge.