Investor's Corner

Tesla (TSLA) blazes past $300 as it shrugs off criticism, focuses on Model 3 deliveries

Tesla stock (NASDAQ:TSLA) is on a rebound after falling more than 5% on Tuesday over news of the US Justice Department’s probe on Elon Musk’s now-infamous “funding secured” tweet last month. On Thursday, TSLA stock blazed past the $300 barrier once more, trading at $303.79 per share after the opening bell.

The recovery of the electric car maker’s stock did not happen overnight. Over the course of Wednesday’s trading, Tesla stock battled an initial drop before beginning a steady 4.93% climb back up to $299.02 per share. Quite surprisingly, Tesla’s strong recovery on Wednesday came amidst the release of negative stories about the company. Former GM Vice Chairman Bob Lutz, for one, was featured on a CNBC Closing Bell segment, where he stated that Tesla was “headed for the graveyard” since it has “no tech advantage, no software advantage, (and) no battery advantage” over rival electric car makers.

AutoNation CEO Mike Jackson also aired his criticism of Elon Musk over his alleged “bait-and-switch” tactic for the $35,000 Standard range RWD Model 3, which is yet to be released. A study in the UK from the country’s Department for Transport further warned motorists that the increasing number of electric vehicles on roads would likely increase congestion and extend travel time. 

Amidst the release of these criticisms were a vote of confidence for the electric car maker. In a note to Bernstein’s clients, analyst Toni Sacconaghi pointed out that Tesla’s vehicles, particularly the Model 3, would probably be unrivaled in the premium electric car segment for a while. Debunking a Tesla bear thesis which suggests that superior vehicles from more experienced manufacturers could easily eat into the upstart company’s market share, the Bernstein analyst stated that “there is no actual flood of competition coming,” and that the Model 3 “faces no credible competition whatsoever until 2020.”

Behind the criticism and the votes of confidence from Wall Street, Tesla also showed signs that it was addressing Elon Musk’s self-dubbed “delivery logistics hell.” Reports from the Tesla community suggest that across the United States and even in Canada, the company is now expediting the delivery process of the Model 3 to as many reservation holders as possible. Tesla is reportedly pushing deliveries so much that handovers are being conducted up to 10 p.m.

As the third quarter approaches its final days, Tesla seems to be focusing on its fundamentals, particularly Model 3 production and deliveries. It remains to be seen how many vehicles the company would manufacture and deliver this Q3, but both CEO Elon Musk and board member Kimbal Musk have teased that Tesla’s numbers this quarter would be quite surprising.

Elon Musk, for one, noted in a letter to employees that Tesla would likely build and deliver “more than twice as many cars as (it) did last quarter.” In a segment of CNBC‘s Closing Bell, Kimbal Musk further stated that “it’s really gonna blow people’s minds how many Model 3s are gonna appear in America in just the next couple of weeks.”

As of writing, Tesla shares are up 1.24% at $302.74 per share. 

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Tesla (TSLA) blazes past $300 as it shrugs off criticism, focuses on Model 3 deliveries
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