Tesla shares rose to an all-time high on the second day of trading in 2020. Company founder Ilon Musk’s fortune has surpassed $27 billion. Shares are rising on the back of a strong finish to last year and an optimistic investor outlook for the future
Tesla met its 2019 plan, mostly thanks to good deliveries of Model 3 sedans in the fourth quarter, and made an optimistic business outlook in China for the year ahead. That helped carmaker Ilon Musk’s stock rise to an all-time high of $448 a paper.
On Friday morning, the company said it had delivered 112,000 vehicles to customers from around the world. That included Tesla delivering 92,550 Model 3 electric cars and 19,450 of the more expensive Model S and X, each worth about $100,000. Total deliveries for the year were about 367,500 units, slightly more than Tesla’s plan to deliver at least 360,000 vehicles. Earlier in 2019, Musk speculated that the figure could reach as many as 400,000 units.
In early trading on the Nasdaq on Friday, Tesla shares rose more than 4 percent to $448.24 (Tesla shares peaked at $454 on January 3. – forbes.ru), while the Nasdaq Composite stock index was down 1 percent. From a low in 2019 ($178.97 per paper per share in trading on June 3), Tesla stock has risen about 250%. The rise accelerated in late October, when, contrary to analysts’ expectations, Tesla ended the third quarter with a profit. Forbes estimates that the fortune of Ilon Musk, the company’s largest shareholder, exceeded $27 billion thanks to Tesla’s steady rise in value over the past few weeks.
Most likely, the share price is positively affected by the rapid launch of the new Gigafactory in Shanghai. The first Chinese-made Model 3s will be delivered to customers as early as next week. Construction on the $5 billion plant is still underway, but at a much faster pace than analysts had expected.
“We continue to work on expanding production both in the U.S. and at our new plant in Shanghai,” Tesla said in an official statement. – Although the first stone of the Gigafactory Shanghai was laid less than a year ago, we have already produced nearly 1,000 vehicles ready for use and have begun shipping.”
The company claims that it has also “demonstrated” that it is capable of producing more than 3,000 cars per week in Shanghai. Admittedly, that number doesn’t account for battery packs — their production in China only began late last month. It is unclear when battery production will reach 3,000 units per week.
In its decade-long history as a public company, Tesla has remained a significant force in the electric car market, but it has also been an extremely unstable player, often struggling to fulfill Musk’s ambitious plans. The company has never yet turned an annual profit, but steady production and sales in China could go a long way toward achieving that goal, barring unforeseen obstacles. The company is also adding the Model Y, a $50,000 electric crossover based on the Model 3 platform, to its lineup this year. That means production volume should increase even more this year.
“Model 3 production volume continues to increase (about 6,700 units per week in the fourth quarter of 2019; up 9% sequentially), and shipments from Shanghai will be another growth driver,” said Baird analyst Ben Callo in a note, who gave Tesla an Outperform rating, which denotes above-market growth potential for the stock. – Importantly, the plant is growing faster than we expected: it has already shown potential production of 3,000 units per week and is launching battery production.”
Vehicle production at Tesla’s Fremont, California plant alone totaled 104,891 units in 2019, including 86,958 Model 3s. For the full year, Tesla produced more than 365,000 electric cars and crossovers.
Because the company does not work with car dealers and sells all of its vehicles itself, Tesla cannot account for the proceeds from the sale of the car until it is delivered to the customer. As a result, the time lag between the production and sale of a car is usually greater for Tesla than for traditional car companies.