Palo Alto, California-based Tesla Inc. entered the new decade on a roll, with its deliveries up 50% in just a year and its market value suddenly higher than General Motors’ and Ford’s combined.
The company announced last week it had produced a record 104,891 cars and delivered 112,000 in the last three months of 2019, sneaking in under the wire on its promise to deliver 360,000 to 400,000 vehicles for the year. The final tally: 367,500.
Figures released last week showed Tesla’s Model 3 sedan accounting for more than 80% of the cars the company produced and delivered in the fourth quarter of the year.
“When you deliver more cars than you produce, you get into your bank more cash than you spent,” New Street Research analyst Pierre Ferragu told the New York Times. With analysts predicting deliveries of up to 500,000 this year, Ferragu said the positive cash flow “would enable Tesla to continue its expansion, including its manufacturing presence in China, where cars are beginning to roll off a Shanghai assembly line,” the paper writes.
Yesterday, Tesla announced it had received permission from German regional legislators to buy a 300-hectare plot of land for its first European factory east of Berlin. “The Gigafactory investment project has taken a big step forward” with the vote at the finance committee of the Brandenburg parliament, said finance minister Katrin Lange.
“Like other states in Germany’s former communist east, the region’s economy still lags behind the more prosperous west,” writes The Local. “Berlin daily Der Tagesspiegel reported this week that bomb disposal teams are already combing the woods on Tesla’s future plot for leftover World War II munitions.”
The Times says Tesla’s year-end news shows it turning a corner after losing US$1.1 billion in the first half of last year. “After falling as low as $177 in June, the company’s stock price started to soar in late October, when Tesla reported a third-quarter profit,” the paper adds. “The stock hit a record closing price Friday, $443.01, up 3% for the day even as the overall market declined.”
This Wednesday, the stock price rose another 5%, to $492.14, bringing Tesla’s market capitalization to about $89 billion, about $2 billion higher than its two Detroit competitors combined, Markets Insider reports. Earlier in the week, the Silicon Valley upstart took its place as the highest-valued automaker of all time, exceeding Ford’s $80.8-billion value in 1999.
“While the recent good news from Tesla has translated into a behemoth market valuation, its U.S. rivals still dwarf the company in some aspects,” Insider notes. “For example, Ford and General Motors each delivered more than two million vehicles in 2019.” And “though Tesla has shown that it can turn a quarterly profit, it has yet to report an annual one, meaning it’s not yet totally in the clear after a rough start to 2019.”
And even while its stock was rising, Tesla still had its share of critics in the investment community, all claiming the company had reached its peak or was over-valued and still risky. On Thursday, the company saw its share price fall 2.2%, to a still-torrid $481.34.