On Thursday, Tesla shares surged to their lowest point in over a decade after Elon Musk confidently predicted a sales increase, reassuring investors about the company’s commitment to expanding its electric car sales. The stock closed with nearly a 22% increase, marking its largest gain. By the end of trading, Tesla’s market value had risen by almost $150 billion.
Musk anticipated a sales growth of 20-30% for the next year, announced plans to unveil an affordable car in the first half of 2025, and highlighted efforts to enhance profit margins through production cost reductions in the third quarter.
The stock price peaked at $262.2 during trading, with approximately 200 million shares exchanged. This jump was the company’s biggest since May 2013, reversing recent losses from concerns that Musk’s focus on new projects like robotaxis was diverting attention.
Musk is striving to transition Tesla from a leading electric vehicle company to an AI and robotics enterprise, although a detailed plan for this shift has not yet been formulated. Investors had sold Tesla stock earlier due to insufficient information about the robotaxi initiative.
Ed Egilinsky of Direxion said, “Some skeptics view this rally as reassuring, especially after the pre-earnings release stock sell-off in October, as the financial results exceeded expectations.”
During the last quarter, Musk made daring company announcements focusing on ventures beyond cars, such as driverless taxis and humanoid robots, causing concerns among investors about shrinking profit margins already affected by price reductions.
Tesla reported third-quarter profit margins surpassing Wall Street forecasts, with production costs at record lows of approximately $35,100 per vehicle. The company also revealed $326 million revenue from its autopilot software, Fully Self-Driving (FSD), integrated into the Cybertruck and other autonomous features.
FSD serves as the foundation for Tesla’s robotaxi program.
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Musk also expressed his belief that Tesla vehicles will soon offer paid driverless ride-hailing services, reiterating his commitment at the robotaxi event. However, this plan may encounter regulatory hurdles.
Despite the reassurances on Wednesday, not all investors are placated by Tesla’s direction.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a significant Tesla investor, stated that robotaxis and AI are not the core businesses he wants Musk to prioritize.
“The good old days were when Elon Musk was sleeping in the factory, working tirelessly every day. He shouldn’t be distracted by ventures that stray from his main focus,” Gerber emphasized.
Source: www.theguardian.com
