Thursday's Market Minute: Tesla Hits All-Time High

While it’s no secret Tesla Inc TSLA shares have been ripping higher since the company reported a surprise profit in third quarter of 2019, December 18 may be Tesla bulls’ favorite day so far this year. Shares surged as much as 4.3% on Wednesday to a brand new all-time high for the stock, trading as high as $395.20 and closing in on CEO Elon Musk’s goal of $420 a share from August, 2018.

This move came on the heels of a report that the automaker is exploring a 20% price cut for its Model 3 sedan in China. The lowered price tag is expected to go into effect in 2020 and will reduce labor costs and increase profit margins at the facility – all while attempting to avoid additional tariffs. Investors have so far liked the progress the automaker has made in China. On the 3Q investor call, Musk said its new Shanghai factory was already in the trial-production phase and would be ready to hit volume production in just “a few months.”

Tesla has followed suit from competitors BMW and Mercedes, who also have factories in China poised for solid revenue growth in the electric-vehicle space. In November of this year, Musk also announced plans for the company’s fourth gigafactory in Berlin. Tesla sales have remained strong in Europe in the first three quarters of 2019, despite an overall slowdown for new cars in the region.

However, Tesla shareholders know this is not the first time Musk has made promises that he may not be able to keep. Investors should be mindful that an electric vehicle tax credit that has benefited Tesla owners in the past is set to expire at the end of this year.

This December 31 is still considerably looming for the automaker. But for the time-being, a 60% increase in stock for this quarter thus far speaks for itself. Let’s see if Tesla can push this momentum forward into the new year.

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Image by Ben Kerckx from Pixabay