Tesla Stock Surges on the First Trading Day After the Company Reported Strong Q1 Deliveries

author: FutureCar Staff    

Shares of electric automaker Tesla surged as much as 8% in pre-market trading on Monday, the first trading day after the company reported strong electric vehicle deliveries for the first quarter of the year.

During Monday's trading session, shares of Tesla hit their highest levels since March 17 after Tesla's encouraging Q1 production and delivery report released last Friday. Tesla's stock closed up $29.30 (4.43%) for the day at $691.05.

After Monday's gains, Tesla is on track to add roughly $50 billion to its market value in a single day.

Tesla's Q1 results beat Wall Street estimates for first-quarter deliveries. Tesla's Q1 deliveries were boosted by strong demand for the Model Y crossover, especially in China, which is the world's biggest auto market.

Tesla delivered 184,800 vehicles during the first quarter, beating analyst estimates of 177,822 vehicles, according to Refinitiv data. Tesla produced 179,757 vehicles in the fourth quarter of last year, so its production has remained stable for two consecutive quarters.

As a result of Tesla's strong Q1 production and delivery totals, at least three brokerages raised their price targets on Tesla's stock. 

Brokerage Wedbush was the most aggressive of the three, increasing it by $50 to $1,000, much higher than the median price target of $712.50, as per Refinitiv data. Wedbush also raised its rating to "outperform" from "neutral".

"Tesla is executing impeccably. I am not surprised by the strong deliveries," Roth Capital Partners analyst Craig Irwin said to Reuters. Although he added that the stock is "egregiously overvalued."

"EVs are an exciting place to be, and Tesla is the leader," said Irwin.

Throughout 2020 Tesla rose to become the world's most valuable automaker with a market cap of $663.3 billion as of Monday. Tesla's soaring stock price over the past year has made its Chief Executive Elon Musk one of the world's richest persons with a net worth of over $160 billion. 

Musk thanked the Tesla team in a tweet on Monday.

"Great work by Tesla team!" Musk tweeted. "Special mention of Tesla China."

As the world's biggest automaker market, China is an important one for Tesla in order to remain profitable going forward. The company's Model 3 and Model Y crossover are among the most popular EVs in China.

For the month of February, consumers in China purchased Mandatory Liability Insurance (MLI) for 18,039 China-made Tesla vehicles. Of the 18,039 Tesla vehicles registered, 13,394 were Model 3 sedans and 4,645 were Model Y crossovers. The total number of registrations more than two of China's leading EV startups NIO and Xpeng combined. 

This strong demand for the Model Y and Model 3 in China is leading to Tesla ramping up its production capability at its factory in Shanghai, which is Tesla's first factory outside of the U.S.

"We are encouraged by the strong reception of the Model Y in China and are quickly progressing to full production capacity," Tesla said in a statement last week.

FutureCar Staff