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Tesla shares surge as carmaker rides out coronavirus shutdown

Company delivered 90,650 vehicles in second quarter

The latest jump pushed Tesla’s market value up to $224 billion, or nearly $20 billion more than Toyota. Photograph: EPA

Thu Jul 2 2020 - 17:46

Tesla revealed on Thursday it had ridden out the coronavirus shutdown far better than expected, triggering a renewed surge in shares a day after it overtook Toyota to become the world's most valuable carmaker.

The electric car maker said it had delivered 90,650 vehicles in the second quarter, well ahead of ahead of analysts’ expectations for 74,130, according to a Refinitiv survey. This was despite closing its Fremont, California, plant from late March to early May.

The news that Tesla's operations had withstood the worst of the shutdown marked a personal victory for Elon Musk, chief executive, who battled local authorities in the San Francisco Bay Area to keep his company's main plant open for as long as possible.

Although the latest quarterly deliveries were still down nearly 5 per cent from the same quarter a year ago, Tesla’s shares continued to rise on Thursday following its overtaking of Toyota by market value 24 hours earlier.

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They were up 8 per cent to $1,207 (€1,074) on Thursday, a more than five-fold increase from $230 about 12 months ago. The company’s shares are up 167 per cent year-to-date.

Market value

The latest jump pushed its market value up to $224 billion, or nearly $20 billion more than Toyota, even though Tesla delivered only 3 per cent as many cars last year and has yet to turn an annual profit.

Tesla’s performance in the quarter was cushioned by output from its new car plant in Shanghai, where operations were largely unaffected by the response to the pandemic. A rapid ramp-up in production at the plant, which opened in early January, has been one of the main factors behind the near three-fold rise in the company’s stock price this year. – Copyright The Financial Times Limited 2020

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