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Tesla Stock Hits A Record High as the Company Beats 2019 Delivery Targets

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【Summary】Electric automaker Tesla has experienced a big turnaround in the second half of 2019. The automaker’s stock has more than doubled over the last seven months, climbing from a 52 week low of $177 in May to a record high of $454 by year’s end, boosted by high demand for the mass-market Model 3 sedan.

Eric Walz    Jan 03, 2020 10:00 AM PT
Tesla Stock Hits A Record High as the Company Beats 2019 Delivery Targets
Tesla's factory in Fremont, California.

Electric automaker Tesla has experienced a big turnaround in the second half of 2019. The automaker's stock has more than doubled over the last seven months, climbing from a 52 week low of $177 in May to a record high of $454 by year's end, boosted by high demand for the mass-market Model 3 sedan. 

The company beat its delivery targets in 2019 with around 367,500 deliveries. The figure is at the low end of Tesla's goal of delivering 360,000-400,000 vehicles in 2019, but its still a record number for the automaker.

In 2018, Tesla delivered 245,240 vehicles, including 145,846 Model 3 and 99,394 Model S and X. The company delivered almost as many vehicles in 2018 as it did in all prior years combined, due to brisk sales of the Model 3.

With strong sales and high-demand both in the U.S. and internationally for its fully-electric vehicles, Tesla is becoming a formidable rival to U.S. automakers Ford Motor Co and General Motors.

Tesla's market valuation now tops $80 billion, surpassing both GM and Ford, two auto giants that have dominated the U.S. auto industry for over 100 years. 

Tesla on Friday said it delivered 112,000 vehicles in the final quarter of 2019, including 92,550 Model 3s and 19,450 Model S and Model X SUVs. which was above expectations of 104,960 vehicles, according to IBES data from Refinitiv. Teslas does not provide individual sales numbers for the Model S or Model X SUV.

Combined with Tesla's new $2 billion Shanghai gigafactory beginning production of the Model 3 for the Chinese market, the company ended 2019 on a high note. Tesla Shanghai factory is its first overseas plant and gives Tesla access to the world's biggest auto market without being subjected to high import tariffs on its U.S. made vehicles, as well as those of its rivals.

In an update this week, Tesla said the Shanghai plant demonstrated a production run-rate capability of more than 3,000 units per week. A Tesla representative said on Thursday that the company will deliver its first China-made Model 3 sedans to the public on Jan. 7, exactly one year after Tesla held a groundbreaking ceremony on the new factory.

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

Its a big turn around for Tesla over the last 17 months, In August of 2018, Tesla CEO Elon Musk was under fire for tweeting about taking Tesla private claiming that funding was secured. Being a publicly traded company, Musk's tweet got the attention of federal regulators, who accused the temperamental CEO of fraud. 

Musk's tweet resulted in Tesla stock price falling over 30% from $365 to $263 by Sept 7, less than a month after the controversial tweet.

The U.S. Securities and Exchange Commission charged Musk with securities fraud, accusing him of manipulating Tesla stock price with unsubstantiated claims on social media. The parties settled in Sept 2018, Musk and Tesla each paying a $20 million dollar fine and Musk agreeing to step down as chairman of the board for 3 years.

The settlement agreement also included Tesla appointing two new independent directors to its board, establish a committee of independent directors, as well as putting in place additional controls to oversee Musk's communications via social media.

Now that 2019 is over, the company is focused on ramping up production of the Model 3 in 2020.

The Model 3 is Tesla's most affordable car and CEO Musk said the mass-market car will keep Tesla profitable in 2020, with lower-range versions starting at $35,000.

Tesla is also working on two new electric vehicles, the Cybertruck and Model Y crossover.

Tesla is also on track to deliver the first the Model Y crossovers in early 2021, which has the potential to be an even bigger hit with consumers that the Model 3. The crossover segment in the U.S. is one of the most popular categories in the auto industry.

The Model Y crossover starts at $43,700 and will get an EPA estimated 300 mile range.

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