The recent stock increases bring Tesla’s market capitalisation to about US$94.6 billion, which is more than General Motors and Ford combined.

By Ian Horswill


Posted on January 14, 2020

Tesla, the electric automotive and solar power company founded and run by CEO Elon Musk, has seen its value hit an all-time high as Tesla shares soared passed the US$500 mark for the first time.

Tesla shares closed at US$524.86 per share at close of trading on Wall Street on Monday. After hours it reached US$531.62.

Analyst Colin Rusch, of Oppenheimer, massively raised his Tesla price target to US$612 from US$385 during Monday and reaffirmed an “outperform” rating. The price target is the most bullish on Wall Street, higher than Piper Sandler’s US$553 target and Canaccord Genuity’s US$515 target.

“Tesla has really proven to be an existential threat for those companies (traditional vehicle manufacturers),” Rusch said, explaining his price hike on “Power Lunch.”

Shanghai

Rusch specifically referenced the message sent by Tesla with its new Gigafactory 3 in Shanghai, which was built in 10 months. It began delivering cars made at Shanghai at the end of 2019 and has reportedly increased production to more than 1,000 vehicles per week.

“First ground to first car was less than a year. I think that put a lot of automakers on notice,” Rusch said.

Elon Musk’s business, whose shares have increased by more than 20% this year, has continued to soar on its entrance into China and fourth quarter delivery figures that exceeded Wall Street’s expectations. The stock has more than doubled over the past three months, according to FactSet.

The recent gains bring the electric automotive manuyfacturer’s market capitalisation to about US$94.6 billion, which is more than that of General Motors and Ford combined.

Elon Musk was at the company’s new plant in Shanghai, China, last week where he announced that the factory would build the SUV Model Y after the Model 3 sedan in a clear bid to gain a bigger share in the world’s largest car market. Future Tesla models will also be built in the Shanghai plant.

cybertruck, tesla, elon musk

Musk also importantly revealed that Tesla will build a China design centre that will design original models for the world. He did not give a timeframe.

The Shanghai plant started trial production in late October and is now producing 3,000 vehicles a week. Tesla started selling cars in China in 2014.

Tesla Model 3

Last week Tesla cut the starting price for its China-made Model 3 sedans by 16% to 299,050 yuan ($US42,919) after making it into the list of electric carmakers eligible for government subsidies. Prices of other models available in the Chinese market have also been cut.

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