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Tesla Stock: What to Expect after Early April Rally

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Nov. 20 2020, Updated 5:10 p.m. ET

Tesla stock

On April 4, 2017, Tesla stock (TSLA) continued to rise and ended the session at its all-time closing high of $303.7. Tesla’s strong 1Q17 vehicle production and delivery numbers could be the primary reason for the gains. Let’s take a closer look.

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1Q17 production and deliveries

In the first quarter this year, Tesla produced about 25,418 vehicle units—64% higher than 15,510 vehicle units produced in 1Q16. Similarly, the company’s 1Q17 vehicle deliveries rose ~69% on a YoY (year-over-year) basis to about 25,000 units from 14,810 units in 1Q16.

Out of these 25,000 cars, Model S deliveries stood at 13,450 units, while about 11,550 units of Model X electric SUVs were delivered.

Despite ongoing production facility ramp up for its low-cost Model 3, Tesla managed to exceed analysts’ expectations in 1Q17 on the production and deliveries front. It could be the primary reason why investors cheered on Wall Street.

Note that Tesla’s annual vehicle production is still just a fraction of mainstream automakers’ (XLY) annual vehicle production rate including General Motors (GM), Ford (F), and Fiat Chrysler (FCAU).

What’s next?

In 2H17, Tesla will likely start producing its much-anticipated Model 3. The company plans to boost its car deliveries starting in fiscal 2018. It set an annual production target of 500,000 vehicle units. Investors could remain focused on timely deliveries of Model 3 and consistency in positive delivery growth going forward.

At the same time, Tesla’s 1Q17 results should play an important role in deciding the near-term direction for its stock.

Read Autonomous Vehicles: Latest Updates in 2017 to learn about automakers and tech companies’ efforts to make autonomous vehicles a reality.

In the next part, we’ll look at Tesla’s valuation multiples.

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