Tesla shares surge 22% after Elon Musk gives surprisingly strong sales forecast
Tesla’s stock soared more than 20% on Thursday after Elon Musk gave a surprisingly strong outlook for the coming year – buoying investors who had been disappointed by the company’s recent “Cybercar” robotaxi reveal.
Musk predicted the electric-car giant – which delivered a quarterly profit of more than $2 billion as it slashed costs and grew car sales for the first time this year — will deliver between 20% and 30% more vehicles next year, far outstripping estimates.
Tesla also said it expects fourth-quarter deliveries to surpass 515,000 vehicles – or 25,000 more than what analysts predicted.
Musk told analysts on Wednesday that he anticipates Tesla will deliver between 2.1 million and 2.3 million cars in 2025 – higher than the 2 million forecast by Wall Street.
Tesla’s Thursday rally – up 22% at $260.48, just off its 52-week closing high of $263.26 on July 10 – was its largest in more than a decade. The shares had risen more than 24% during a single trading session in May 2013.
Tesla’s stock is still down 37% from its all-time closing high of $409.97, which was set on Nov. 4, 2021.
Dan Ives, a senior analyst at Wedbush Securities, praised Musk’s “Aaron Judge-like results” — a reference to the New York Yankees slugger who helped power the Bronx Bombers into the World Series.
“There is more wood to chop for Tesla and this recovery story still has some challenges ahead,” said Ives, whose firm mainted a $300 per share price target.
“That said, last night was the first major step on this recovery path and we believe was a seminal quarter for Musk and Tesla to prove the doubters wrong.”
Analysts noted that Tesla expected to begin production of its Semitruck and Cybercab sometime in 2025. The company has also pledged to roll out more affordable models of its EVs.
In its deck presentation to investors, Tesla said that its cost of goods came down to its lowest level ever at around $35,100 per vehicle.
The company cited lower costs for raw materials as well as cheaper freight, duties and one-time charges.
Tesla also cited its cost-reduction efforts. Since 2023, Tesla has shed at least 14% of its workforce – trimming its global head count down to just over 121,000 employees.
The company also reported operating cash flow of $6.3 billion in the third quarter as well as free cash flow of $2.7 billion.
“We have sufficient liquidity to fund our product roadmap, long-term capacity expansion plans and other expenses,” the company told investors.
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