Tesla produced a record number of vehicles in last year’s fourth quarter, meeting their year-end goal, according to Bloomberg, sparking optimism among investors.
Tesla’s annual deliveries for 2019 increased by about 50 percent from the year before.
Production also included 1,000 cars from a new factory in Shanghai, with deliveries to Chinese customers starting last month.
The 112,000 electric vehicles produced by Tesla surpassed Wall Street expectations and boosted its market valuation to nearly 80 billion, more than double the stock value of Ford.
Share prices surged to $420, after reaching a low of $177 in June. The company reported a $1.1 billion loss in the first half of 2019.
According to Gene Munster, managing partner of the venture capital firm Loup Ventures:
“Tesla is close to escape velocity. Demand for electric vehicles is real, and people are stretching to buy a Model 3. Everything is beginning to gel.”
In past years, Tesla has often seen as many setbacks as successes. Deliveries in the first quarter of 2019 were disappointing, and 7 percent of their workforce was laid off. Tesla chief Elon Musk was involved in a series of public controversies, mostly of his own making. Now, with record numbers, surprise profits announced for the third quarter of 2019, and a sustained surge in share prices, observers are suggesting that Tesla may have finally found solid footing.
Efforts by established carmakers to produce competing “Tesla Killer” electric vehicles have failed to derail the company, which has continued to dominate the market for electric vehicles in the US.
Nearly 80 percent of the vehicles produced in the fourth quarter were the affordable Model 3s, which have become the best-selling electric car in the US, vastly outstripping sales of other options, including Tesla’s other models as well as the Chevrolet Bolt and the Nissan Leaf. Sales of the Bolt fell 47 percent in 2019’s final quarter.
Tesla is in the midst of a global expansion—until production started at the Shanghai plant, Teslas were only produced at the company’s California plant. In November, Musk said another factory will be built in Germany, where electric cars from the country’s established automakers have largely failed to take hold. Musk said an engineering and design facility will accompany the factory, which will produce the Model 3 as well as Tesla’s forthcoming SUV, the Model Y.
Musk has said he expects the Model Y to sell more than the S, X, and the 3 combined, and with overlap in production parts for the Model 3, is likely to save on production costs for the company. US car buyers have been buying fewer sedans like the Model 3, and steadily shifting toward SUVs.
For now, Tesla’s only SUV offering is the luxury-priced Model X. The Model Y is expected to be priced affordably, closer to the Model 3—and is expected to go into production later this year.
Photo by Punkdali [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)]