Following reports of the better than expected and record deliveries made by the United States based electric car maker Tesla in the first quarter of the year, the shares of the company surged on Monday to the extent that the company is now poised to add about $50 billion to its market value.
The strong performance of the company in the first quarter also showed it overcoming the global shortage of automobile chips that has hit the entire auto sector of the world.
The share price of the electric car maker was nearly 8 per cent in pre-market trading and was on track to hit their highest in over a month.
The strong reception of its Model Y crossover in the Chinese market was very encouraging for the company and the company was moving quickly to achieve full production capacity, the electric-car maker had said on Friday.
J.P.Morgan analysts wrote in a note that the ability of Tesla to manufacture roughly the same amount of vehicles in the first quarter of the current year as in the fourth quarter of last year “stands out relative to the trend in global light vehicle production”.
An eight fold surge in the share value of the company throughout last year has also helped to boost the personal wealth of the company’s Chief Executive Officer Elon Musk. The company is also the most valued auto company in the world even though the company makes just a fraction of the cars annually than those made by its rivals such as Toyota Motor, Volkswagen and General Motors.
At least three brokerages ratcheted up their price targets on Tesla’s stock. Brokerage Wedbush made the most aggressive move by hiking its target by $50 to $1,000, much higher than the median price target of $712.50, as per Refinitiv data.
According to Refinitiv data, during the first quarter of 2021, Tesla delivered 184,800 vehicles globally which easily beat analysts’ estimates of delivery of 177,822 vehicles.
Tesla’s shares were at $713 before the bell, while other EV makers, including NIO Inc, Workhorse Group and Xpeng Inc were up about 3%.
“The (EV) sector looks primed to resume its march higher, considering the surging demand for EVs in China, Europe, and the U.S. Tesla’s delivery numbers could be the spark needed to jumpstart the next rally,” said Jesse Cohen, senior analyst at Investing.com.
(Adapted from Reuters.com)