Late Tuesday, CEO Elon Musk tweeted that Tesla (NASDAQ:TSLA) had made its 1,000,000th car. This news comes as the electric vehicle maker is dealing with the COVID-19 outbreak that caused car sales in China to plunge 80% in February.
Tesla opened its new Gigafactory in Shanghai in the fourth quarter, when it began turning out the first Model 3 deliveries in China. A factory to produce the Model Y also just broke ground in Shanghai. These new factories position Tesla to accelerate revenue growth, but the virus could disrupt those plans in the near term.
Will Tesla deliver in 2020?
The higher rate of production expected in China is one reason why this growth stock took off to start the year, roughly doubling in value before falling over the coronavirus. The stock is currently up 50% year to date.
Tesla generated more than $1 billion in free cash flow in 2019, as its scale continues to ramp up. Management is targeting production of 500,000 units per year from its factories in Fremont, while management is targeting production for the Model 3 in Shanghai to reach 150,000 per year.
However, with car sales plunging in China over the virus, it's unclear whether Tesla will be able to hit those targets. Production will pace ahead of deliveries in the short term, but Tesla has guided for 500,000 deliveries in total this year.
The stock has fallen 15% over the last week, as investors are concerned that Tesla won't meet its goals in China in the short term. Tesla is also seeing strong demand for solar and storage deployments, which are expected to grow 50% in 2020, giving growth investors another catalyst to keep an eye on.