Tesla surged as much as 10% to new record highs on Thursday night. During the day, the company revealed second-quarter delivery numbers that blew recent analyst estimates.
For the quarter, Tesla delivered 90,650 vehicles, well ahead of analyst estimate for 83,000 deliveries in the quarter. The company delivered 10,600 Model S and Model X vehicles and delivered 80,050 Model 3 and Model Y vehicles.
While Tesla beat delivery estimates, the company took a hit on the production side because of the COVID-19 pandemic. The total number of vehicles produced was down 20% in the quarter to 82,272 vehicles.
Tesla said, “While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels.” Tesla added that their car delivery numbers “should be viewed as slightly conservative” and could vary by up to 0.5% or more due to the company only counting a car as delivered” and may vary by up to 0.5% or even more because of the company only counting an automobile as shipped “if it is transferred to the customer and all paperwork is correct.”
Tesla’s Thursday night surge to new all-time highs only solidifies its position past Toyota as the world’s most valuable auto manufacturer, which happened for the very first time yesterday.
China’s demand for Tesla vehicles is also rebounding, according to Wedbush analyst Dan Ives. “The clear standout this quarter is the massive underlying demand coming out of China as we have seen demand surge in China for Model 3’s in this key region with Giga 3 firing on all cylinders despite the softness seen earlier in April,” said Ives.
Ives added that if Tesla delivered close to 90k vehicles, that they surpassed, then it might “put the bottom-line in the area code of breakeven, a jaw-dropping feat in a dark macro and COVID backdrop for Musk & Co.”
If Tesla manages to breakeven in the next quarter, it could make the company eligible to be included in the S&P 500, which, if happened, would increase the demand for Tesla stocks as passive ETFs and shared funds linked with the index would be required to buy Tesla’s stocks.
Ives expects Tesla to deliver up to 450,000 vehicles for the entire year and said its bull case now demands Tesla to increase the stock price to $2,000, representing a potential upside of 64% from current levels. Year-to-date, Tesla is up more than 190%. The business’s meteoric rise has led traders to find another Tesla, leading them into smaller electric-vehicle manufacturers like Nikola Workhorse and Motors, the owner of a 10% stake in Lordstown Motors.