Tesla stock hits record high as deliveries top forecast

BENGALURU (India) • Tesla beat Wall Street estimates for annual vehicle deliveries and met the low end of its own target, sending shares to a record high in a vindication for chief executive Elon Musk after a few turbulent years.

Boosted by demand for its mass-produced Model 3 sedans as overseas sales pick up, Tesla last Friday said it delivered 112,000 vehicles in the fourth quarter, comprising 92,550 Model 3s and 19,450 Model S/X SUVs, which was above expectations of 104,960 vehicles, according to IBES data from Refinitiv.

The Silicon Valley carmaker delivered approximately 367,500 vehicles during all of last year, just meeting the low end of its target of 360,000 to 400,000 vehicles. Its stock hit a record closing price of US$443.01 last Friday, up 3 per cent for the day even as the overall market declined.

The stock has had a strong run in recent months after posting a rare profit in the latest quarter and news of a China ramp up. With a market valuation of more than US$80 billion (S$108 billion), Tesla is far outstripping those of traditional carmakers General Motors and Ford Motor.

The delivery results defy sceptics of Mr Musk, whose mercurial behaviour over the last two years came under close scrutiny from federal regulators and shareholders of Tesla.

Tesla also provided an update on its Shanghai factory, which has started churning out Model 3 cars. It said the plant demonstrated a production run-rate capability of more than 3,000 units per week.

The run-rate shows that the factory appears to be ramping up faster than expected, Baird Equity Research analyst Ben Kallo said. "Shanghai deliveries should be the next catalyst to drive volume growth."

A company representative said last Thursday that Tesla will deliver its first China-made Model 3 sedans to the public tomorrow. The Model 3 is Tesla's most affordable car, with lower-range versions available starting at US$35,000.

Analysts in the past have questioned how rapidly Tesla's vehicle sales will grow as government subsidies for electric vehicle purchases dwindle in the United States, China and other markets.

Traditional automakers largely relying on fuel-powered vehicles last Friday reported a decline in fourth-quarter US sales and saw their shares tumble as a widening conflict with Iran pushed up oil prices by more than US$2 a barrel.

Fiat Chrysler Automobiles last Friday said it saw a 2 per cent fall in US car sales, while GM reported its fourth-quarter US deliveries were down more than 6 per cent.

"The recently escalating geopolitical uncertainties driving oil prices higher are likely to create a tailwind for Tesla shares," Canaccord Genuity analyst Jed Dorsheimer said.


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A version of this article appeared in the print edition of The Straits Times on January 06, 2020, with the headline Tesla stock hits record high as deliveries top forecast. Subscribe