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.

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.”