Tesla poised for global expansion after just missing 2020 target

Palo Alto, California

TESLA Inc came within a hair of meeting its 500,000-vehicle goal for 2020, setting the stage for a new year in which it's expanding in China and poised to open new factories in Texas and Germany.

The electric-car maker said Jan 2 it delivered 180,570 vehicles in the year's final three months, the most for any quarter ever but falling just 450 vehicles shy of the half-million mark chief executive officer Elon Musk had set for the entire year.

Tesla has been ramping up output of its mass market models to meet rising global demand for battery-powered cars, with 2020's total jumping 36 per cent from the prior year.

"The good news is Tesla has the formula consumers want," Gene Munster, managing partner at Loup Ventures, wrote in a note to clients. "The bad news is to keep up with this demand, the company needs to quickly build new factories in Austin, Texas, and Brandenburg, Germany. While they made it look easy in Shanghai, ramping production is difficult and will be one of the most important Tesla topics in 2021."

The result capped a remarkable year for Mr Musk and his company, which joined the Standard & Poor's 500 Index on Dec 21 after posting five consecutive quarters of profit.

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Tesla's shares rallied 743 per cent in 2020, giving it a US$668.9 billion stock-market capitalisation.

Mr Musk took to Twitter to praise his team, and noting that in its earliest days he thought the carmaker had only a 10 per cent chance of even surviving.

Palo Alto, California-based Tesla's shares rose 1.6 per cent on Dec 31 to end the year at US$705.67.

The quarterly delivery figure is widely seen as a barometer of demand for both Tesla's vehicles and consumer interest in electric vehicles (EV) worldwide.

The company said in a statement on Saturday its delivery count should be viewed as slightly conservative and final numbers could vary by up to 0.5 per cent or more.

"Musk & Co basically hitting its 500k goal for the year is a major feather in the cap for the company and the bulls as Tesla saw robust Model 3 demand over the last 10 months despite the hurricane-like consumer headwinds seen globally" because of the Covid-19 pandemic, Wedbush analyst Daniel Ives wrote in a note after the results.

Tesla had predicted in January 2020 - before the onset of the coronavirus pandemic - it would "comfortably exceed" sales of half a million cars. The company said in October that it still expected to meet that target despite a temporary shutdown of its factories in the spring, and Mr Musk signalled it was well within reach in a internal email sent to employees in December and viewed by Bloomberg.

Analysts also predicted Tesla would meet its sales goal for the year, which further buoyed the company's shares in the waning days of 2020. The surge occurred despite multiple share offerings.

The company undershot the 181,000-vehicle threshold it needed to clear in the most recent quarter, a 30 per cent jump over the July-September period.

The push largely depended on increased output from its Chinese plant and higher output in the US of the newest car in its lineup: the Model Y. Tesla said Model Y production in Shanghai has begun, with deliveries expected to begin soon.

While Tesla is the clear global market leader, its vehicle deliveries are tiny compared to the millions of petrol-powered cars and trucks sold by established automakers such as General Motors Co and Volkswagen AG.

Those two carmakers and others are preparing to flood the nascent EV market with dozens of battery-powered models over the next five years.

To capitalise on its head start, Tesla is building two new vehicle assembly operations - the one outside Berlin that could eventually assemble as many as 500,000 cars annually, and the one in Texas that will make the brand's first pickup. Both are expected to start production later this year, joining its existing vehicle-assembly facilities in Fremont, California, and Shanghai.

Once known for niche luxury models such as its S sedan and X sport utility vehicle, Tesla has broadened its appeal with the 3 and Y models priced to start below US$50,000.

Mr Musk said in September that he plans to start sales of a cheaper US$25,000 Tesla by 2023. BLOOMBERG