Tesla poised for expansion after just missing 2020 target

Tesla Inc. came close to meeting its 500,000 vehicle-deliveries goal for 2020, setting the stage for a new year in which it's expanding in China and poised to open new factories in Texas and Germany.

The electric-car maker said Jan. 2 it handed over 180,570 vehicles in the year's final three months, the most for any quarter but just 450 vehicles shy of the half-million mark chief executive Elon Musk sought for the year.

Tesla has been ramping up output of its more mass-market models to meet rising global demand for battery-powered cars, with 2020's total jumping 36 per cent from the prior year.

“The good news is Tesla has the formula consumers want,” Gene Munster, managing partner at Loup Ventures, wrote to clients. “The bad news is to keep up with this demand, the company needs to quickly build new factories in Austin, Texas, and Brandenburg, Germany. While they made it look easy in Shanghai, ramping production is difficult and will be one of the most important Tesla topics in 2021.”

Musk and Tesla had a remarkable year, with the company joining the S&P 500 Index in December after five consecutive quarters of profit. The shares rallied 743 per cent in 2020, giving the carmaker a US$668.9-billion stock-market capitalization. Musk — who ended the year as the world's second-richest person — took to Twitter to praise his team, saying that in its earliest days he thought the carmaker had only a 10 per cent chance of even surviving.

Tesla shares rose as much as 5.2 per cent before sliding to US$726.67 as of early afternoon in New York on Monday. The stock closed at a record US$705.67 on Dec. 31.

The quarterly delivery figure is widely seen as a barometer of demand for both Tesla's vehicles and consumer interest in electric vehicles worldwide. The company says its quarterly deliveries statements should be viewed as slightly conservative and that final numbers could vary by 0.5 per cent or more.

“Musk & Co. basically hitting its 500k goal for the year is a major feather in the cap for the company and the bulls as Tesla saw robust Model 3 demand over the last 10 months despite the hurricane-like consumer headwinds seen globally” because of the Covid-19 pandemic, Wedbush analyst Daniel Ives wrote in a report.

Tesla had predicted in January 2020 — before the onset of the coronavirus pandemic — it would “comfortably exceed” sales of half a million cars. The company said in October it still expected to meet that target despite a temporary shutdown of its factories in the spring, and Musk suggested it was within reach in an internal email in December.