The Tesla Gigafactory in Shanghai where the electric-car maker is ramping up output. Picture: AFP/HECTOR RETAMAL
The Tesla Gigafactory in Shanghai where the electric-car maker is ramping up output. Picture: AFP/HECTOR RETAMAL

Bengaluru/New York — Tesla has beaten Wall Street estimates for annual vehicle deliveries and met the low-end of its own target, sending shares to a record high in a vindication for CEO Elon Musk after a few turbulent years.

Boosted by demand for its mass-produced Model 3 sedans as overseas sales pick up, on Friday Tesla said it delivered 112,000 vehicles in the fourth quarter, including 92,550 Model 3s and 19,450 Model S/X SUVs, which is above expectations of 104,960 vehicles, according to IBES data from Refinitiv.

The electric vehicle (EV) maker delivered approximately 367,500 vehicles during all of 2019, just meeting the low end of its target to deliver 360,000 to 400,000 vehicles in 2019.

Tesla shares were up as much as 5.5% at $454, touching a record high.

The stock has had a strong run in recent months after posting a rare profit in the latest quarter and news of its China ramp-up. With a market valuation of more than $80bn, Tesla is far outstripping those of traditional carmakers General Motors (GM) and Ford Motor.

The delivery results defy sceptics of Musk, whose mercurial behaviour over the past two years came under close scrutiny from federal regulators and Tesla shareholders.

Musk, who has more than 30-million Twitter followers, has a history of firing off tweets that resulted in an investigation by the US Securities and Exchange Commission (SEC) and a defamation trial against him.

The Tesla CEO settled the SEC complaint for $20m in 2018 and a Los Angeles jury cleared Musk in the defamation case in December.

“Elon has Tesla executing right on track,” said Roth Capital Partners analyst Craig Irwin.

China ramp-up

Tesla also provided an update on its Shanghai Gigafactory, which has started churning out Model 3 cars. It said the plant demonstrated a production run-rate capability of more than 3,000 units a week.

The run-rate shows that the factory appears to be ramping faster than expected, Baird Equity Research analyst Ben Kallo said. “Shanghai deliveries should be the next catalyst to drive volume growth.”

The $2bn factory, Tesla’s first car manufacturing site outside the US, is the centrepiece of its ambitions to boost sales in the world’s biggest automotive market and avoid higher import tariffs imposed on US-made cars.

A company representative said on Thursday that Tesla will deliver its first China-made Model 3 sedans to the public on January 7. The Model 3 is Tesla’s most affordable car, with lower-range versions available starting at $35,000.

In the past, analysts have questioned how rapidly Tesla’s vehicle sales will grow as government subsidies for EV purchases dwindle in the US, China and other markets. Some analysts consider those subsidies the biggest driver for Tesla purchases.

On Friday, traditional carmakers largely relying on fuel-powered vehicles reported a decline in fourth-quarter US sales and saw their shares tumble as a widening conflict with Iran pushed oil prices up more than $2 a barrel on Friday.

Fiat Chrysler Automobiles said on Friday thatit saw a 2% fall in US vehicle sales, while GM reported its fourth-quarter US deliveries were down more than 6%.

Canaccord Genuity analyst Jed Dorsheimer said, “The recently escalating geopolitical uncertainties driving oil prices higher are likely to create a tailwind for Tesla shares.”