If there’s one thing investors can count on, it’s that a big market move like the one Monday will be amplified in shares of Tesla Inc. (NASDAQ: TSLA). Market indexes dropped more than 7% on Monday and Tesla stock dumped about 13.5%. In premarket trading Tuesday, indexes were up about 3.5% and Tesla stock was up more than 8%.
In addition to the general recovery in stock prices, Tesla CEO Elon Musk said Tuesday morning that the company has now produced a million vehicles. Actually, Musk tweeted the news as a congratulatory message to the company’s employees late Monday evening.
Tesla delivered its first model, the Roadster, in February 2008 to (who else) CEO Musk. The company went on to build 500 of that first model. Last year, the company delivered 367,500 vehicles, a year-over-year increase of more than double.
The entry-priced Model 3 gets the credit for the boom in sales. A total of 92,550 Model 3 sedans were delivered in the fourth quarter of 2019, along with a combined total of 19,450 Model S sedans and Model X sport utility vehicles.
When Tesla announced fourth-quarter production and deliveries, the company noted that it had produced “just under 1,000 salable” Model 3 sedans and “demonstrated production run-rate capability of greater than 3,000 units per week” at its new Gigafactory in Shanghai.
Given the economic slowdown in China due to the coronavirus outbreak, Tesla’s ambition to build 12,000 Model 3 sedans a month in Shanghai may be out of reach for this year.
Other headwinds for Tesla include more electric vehicle (EV) introductions from German, Chinese and U.S. automakers. Chinese EV-maker Nio Ltd. (NYSE: NIO) recently announced a $1.4 billion agreement with a municipal government that will give the company a shot at getting its ES8, a luxury SUV, which competes with Tesla’s Model X, out the door. Nio’s ES8 has a starting price of around $67,000, compared to the Model X price of around $81,000.
BMW has sold more than 500,000 EVs and expects to have 1 million on the road within a couple of years. Volkswagen, which has plans to launch some 70 EV models over the next several years, is not sitting on its hands either.
Closer to home, General Motors Co. (NYSE: GM) earlier this month announced some EV technology that would provide 400 miles of range for its coming vehicles. The company is also focussed on lowering battery costs to below $100 per kilowatt-hour, about half the current price. That is well within the range of possibilities, given an earlier estimate from analysts at BloombergNEF that batteries would reach that lower level by 2025.
Shortly after Tuesday’s opening bell, Tesla stock traded up about 9.5%, at $666.67 in a 52-week range of $176.99 to $969.99. The consensus 12-month price target on the stock is $504.33.
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