— This is the script of CNBC's news report for China's CCTV on July 3, 2020, Friday.
The immediate reason for the surge in Tesla's share price is its over-expected deliveries amount. It delivered 90,650 in the second quarter, well above market expectations of 72,000. On the back of the positive data, we saw Tesla shares jump nearly 8% in Thursday trading and hit a new record high of $1208.66. What we see here is a ten-year chart of Tesla's stock price. It went public on June 29,2010, at just $17, till now its overall increase in the decade is almost 70-fold. It's performance in the past one and half year is amazing, last year, it grew more than 438%.
Tesla now has a total market capitalization of $224.1 billion, making it the most valuable auto company in the world. Still, Tesla is far below its peers in terms of delivery and profits. For reference, GM delivered more than 490,000 vehicles in the U.S. in the second quarter. But in terms of momentum and potential, it could be a different story. Tesla's deliveries fell nearly 5% in the second quarter compared with the same period last year, as a result of the outbreak. Gm, Toyota, Fiat Chrysler and Ford both saw their deliveries fall by more than 30% in the second quarter from a year earlier, and Nissan by nearly 50%.
So, the former Ford CEO is bullish on Tesla, and believes that tesla's rise is based on a combination of past growth and future expectations.
TPG Capital senior advisor and former Ford president and CEO
even in this depressed economic environment, you're seeing places like China and Europe not backing off co2 reduction targets which are important for electrification I think ELON was very very focused on profitability in second quarter, so that if he could be profitable this quarter that would be four profitable quarters in a row and with that accumulated profit you can be eligible to be included in the S&P 500 and if that's the case not only will Tesla get the prestige of that but also I think a lot of index funds will be driven to include Tesla in their portfolio which will increase the demand for the stock potentially going up through .
Despite the incredible earnings and overall positive outlook, Tesla continues to be plagued by bearish investors. Barron's pointed out that more than 10 percent of Tesla shares can be traded to trade short, a bet that the stock price will fall, which is much higher than the average short interest among Dow components.
Musk himself has publicly pointed out or suggested several times that Tesla's stock price is too high and crazy. However, Tesla's short sellers have been unsuccessful lately. In terms of risk factors, one market focus is Tesla production. In the second quarter, Tesla produced about 82,000 vehicles and its California plant was closed for a long time due to the outbreak. So, some analysts point out that a lot of this may be due to the Shanghai plant, but if the epidemic worsens in the US, Tesla's production capacity could be further squeezed.
On the other hand, China is an increasingly important market for Tesla, both in terms of production and sales. In China, Tesla faces a big challenge from its peers in electric cars. How's Tesla going in China? That is another focus. We will keep an eye on this issue as well.