Tesla

Tesla

04 December 2018Reading time: 3 minutes

In July this year, we wrote about the production problems at Tesla and about its chairman and founder Ellon Musk who became discredited. Amongst other things, this led to unrest among the shareholders and to a volatile stock price development. By now the American manufacturer of electric cars has worked hard on improving the production and distribution problems. The recent presented third quarter results are reflecting the success of these improvements.

Tesla achieved a production record of 80,142 cars over the past quarter. This resulted in an production increase of 50% compared to the second quarter of this year. Especially the production growth of the Model 3 is striking, which is the same model that caused to most problems for Tesla earlier this year. Over the past third quarter, no less than 53.239 Model 3 cars were produced. The production of the Model S and Model X remained almost the same compared to the second quarter. Eventually a total of 83.500 cars were delivered over the past quarter, which resulted in a total revenue of almost 6.1 billion dollar for the automotive division of Tesla. This accounted for a 158% growth on an annual basis and a 82% growth on a quarterly basis. Besides cars Tesla also manufactures solar panels and battery packages, but cars are by far the most important activity.

The significant improved production- and turnover numbers are especially due to the many improvements Tesla implemented over the past period. For example, the company had built a gigantic tent construction exclusively for the production of the Model 3 in Fremont (United States). This could increase the production of this car considerably. Also, Tesla has speed up the construction of their newest factory in Shanghai. From this factory Tesla can distribute its cars faster and cheaper throughout the Asian market and avoid the import tariffs on foreign cars.

Last year the founder and chairman of Tesla, Elon Musk, became discredited after he had send out a Tweet in which he alluded to the privatization of Tesla. Thereafter the American stock exchange watchdog SEC accused Musk of deliberate price manipulation. By now both parties have come to an agreement in which Musk has to step down for three years as chairman of Tesla and both Musk and Tesla have to pay a fine of 20 million dollar each. Elon Musk will continue to be CEO of the company for the next three years.

The stock price of Tesla has been particularly erratic, with $ 250.56 as the lowest point on October 8th and $ 379.57 as the highest point on August 7th. Compared to a year earlier the stock price is now 7% higher at 338,19 dollar (23.11.2018).

The future price of the stock is subject to several political, industrial and sector specific as well as economic factors. Investors should consider such risk when making their investment decisions. Developments can be different at any time than investors expect, which can result in capital losses.

Vontobel products on Tesla are tradable at DEGIRO.

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10/12/2018 06:02:50