Please ensure Javascript is enabled for purposes of website accessibility

Why Tesla Inc. Stock Jumped Tuesday

By Daniel Sparks – Updated Apr 3, 2018 at 12:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Though Model 3 production is still behind schedule, it's finally gaining momentum.

What happened

Volatility in Tesla's (TSLA -1.10%) stock price continued on Tuesday when shares rebounded, recovering somewhat from Monday's decline. Shares climbed as much as 6.9% in morning trading, and were up 3.3% at the time of this writing. The stock's rise came after Tesla's update on quarterly vehicle deliveries and production on Tuesday morning.

In what Tesla said was its "most productive quarter in Tesla history," total vehicle production increased sharply and Model 3 deliveries soared. And in an important piece of news, Tesla  reassured investors it won't need to raise equity or issue debt this year. 

A woman unlocks her Model 3 with a Tesla app on her smartphone

Model 3. Image source: Tesla.

So what

Specifically, Tesla said it produced 34,494 vehicles and delivered 29,980 vehicles during its first quarter. Those figures were up 36% and 20%, respectively,  from production and deliveries in the year-ago quarter.

Production and deliveries of the Model 3 jumped from 2,425 and 1,542 units, respectively, in the fourth quarter of 2017 to 9,766 and 8,180 Model 3 units in Q1. Tesla also noted the quality of Model 3 production is at the highest level the automaker has seen across all of its products.

"This is reflected in the overwhelming delight experienced by our customers with their Model 3's," the company said in a press release. "Our initial customer satisfaction score for Model 3 quality is above 93%, which is the highest score in Tesla's history."

Now what

Tesla achieved a production run rate of over 2,000 Model 3 units per week in the past seven days, but missed its target to finish the quarter with a run rate of 2,500 units per week. Despite that, Tesla management still says they expect to achieve a production run rate of 5,000 Model 3s per week in about three months.

With Model 3 production and deliveries expected to soar, management said the company should achieve "the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow" by the third quarter.

Daniel Sparks owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$265.25 (-1.10%) $-2.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
104%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.