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Tesla’s Share Price Surges 18%
Tesla Inc.’s third-quarter profit and bullish outlook triggered an 18% jump in the company’s share price to its highest price in eight months.
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Tesla Inc.’s third-quarter profit and bullish outlook triggered an 18% jump in the company’s share price to its highest price in eight months.
Shares closed yesterday at $299.68, up $45, on Tesla’s strong third-quarter earnings report two days ago. The surge gave Tesla a greater market value than General Motors Co., making it the most valuable U.S. car company.
Investors are buoyed by evidence that Tesla is finally conquering the challenges of high-volume production. Their hope now is that the company, which has never posted a full-year profit, may soon do so.
Skeptics note that CEO Elon Musk has promised but failed repeatedly to meet performance targets. The speed with which Tesla erected its $2 billion assembly plant in Shanghai is helping to convince investors that the company is poised to join the ranks of mass-market carmakers.
But China watchers caution that the Chinese facility’s initial output will be about 1,000 cars per week—only one-sixth its intended capacity of 300,000 units per year.
Volkswagen CEO Herbert Diess suggests that Tesla has already reached major-league status. Yesterday he pointed to the success of the company’s $39,500 Model 3 electric sedan, declaring to reporters that “Tesla is not niche.”
Diess says VW has considerable respect for the carmaker, describing Tesla as “a competitor we take very seriously.”
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