Tesla shares pushed above $US1,000 again on Monday (US time) after Tesla CEO and co-founder Elon Musk flagged the electric car company could break even for the second quarter and also won a top going as best CEO.
Musk flagged the possibility of a break-even year in an email to staff, adding to the positive move around the stock with the much awaited Battery Day approaching in September, along with confirmation of a massive new battery planned in Nevada, and the global expansion of the Model Y electric SUV,
“Breaking even is looking super tight,” Musk wrote in the Monday email, first reported by Electrek and also seen by Reuters.
“Really makes a difference for every car you build and deliver. Please go all out to ensure victory!”
Tesla shares rose 5.17% to close at $US1,009.35 ($A1,466.70) on Monday, signaling a second run over $US1,000 since Tesla first hit the milestone mark that pushed its value over that of global car giant Toyota in early June.
Musk’s email on Monday came after the Tesla chief apologised for shifting delivery dates via Twitter last Thursday, an acknowledgement of the intense logistics being navigated as the EV maker pushes to ramp up deliveries in the US towards the quarter end.
With its newfound position as global auto leader (in terms of market cap), the pressure is on for Tesla to avoid reporting an operating loss for the quarter, despite the factory closures made necessary to contain the Coronavirus pandemic.
Although Tesla’s Shanghai Gigafactory was re-opened in February, its Fremont factory was closed for 6 weeks as the infectious Coronavirus took hold in the US.
While auto factories are now open again, many legacy car makers are expected to report operating losses for the second quarter, following from what was already a difficult first quarter.
Tesla surprised investors at the end of the first 2020 quarter with its first ever profit for what is traditionally a negative quarter (factories had only been closed for a week or so), delivering 88,400 vehicles and announcing it had officially started delivering its fourth volume electric vehicle, the Model Y.
For the second quarter, Reuters reports that on average, analysts are expecting the EV maker to deliver 74,000 vehicles according to Refinitiv data. Whether this proves true will be confirmed in coming days when Tesla releases its official delivery numbers.
Overall, despite the slow down of EV production and controversy that followed Musk’s threats to leave California if permission to reopen the Fremont factory was not given, Tesla has gone from strength to strength in 2020.
On the back of the opening of the Shanghai factory and a profitable 2019, Tesla shares are now worth more than double the $US430 at year’s start. In a decade, share values have multiplied in value by 50.
Even though Musk also heads up SpaceX – which just made history by becoming the first privately held US company to launch NASA astronauts into space – it is his performance as Tesla chief that has formed Barron’s opinion that Musk should be considered one of the top CEOs of 2020.
“Musk, 48, makes Barron’s list because of Tesla, which he co-founded and has led for 12 years. His tenure has been marked by controversy, but from an investment perspective, it has been an amazing run: The stock has gone up roughly 50-fold since it started trading in 2010, and has more than doubled this year,” writes Barron’s.
While at times a rocky ride, Musk’s “broader vision” is what will keep the company paying off for Tesla customers and investors, says Barron’s, as Musk keeps pushing for an autonomous, and zero emissions, driving future that has legacy car makers – most recently Daimler and Volvo – re-assessing their raison d’être as they seek to close the gap on what has become the most disruptive mobility company of our time.
Bridie Schmidt is lead reporter for The Driven, sister site of Renew Economy. She specialises in writing about new technology and has been writing about electric vehicles for two years. She has a keen interest in the role that zero emissions transport has to play in sustainability and is co-organiser of the Northern Rivers Electric Vehicle Forum.