Tesla stock soars and hits an all-time high — here's why

Tesla's stock just broke through its all-time high. Wall Street is beginning to comprehend the implications (and opportunity) for Tesla in China. Discussing the Shanghai Gigafactory, Oppenheimer's analyst Colin Rusch explains, "First ground to first car was less than a year. I think that put a lot of automakers on notice... Tesla has really proven to be an existential threat for those companies."

Above: Tesla Model S, 3, and X side-by-side (Source: Tesla)

According to Business Insider, "Colin Rusch of Oppenheimer raised his Tesla price target to $612 from $385 on Monday... beating out Piper Sandler's $553 target and Canaccord Genuity's $515 target." Rusch sees Tesla as a "must-own" stock that could benefit from inclusion in additional indexes. Tesla's powertrain technology, power and data architecture, and operating system are about three years ahead of the competition, Rusch wrote in a report from Oppenheimer.

Although news in China and analyst upgrades continue to push the stock higher, Tesla's results in Q4 remain an indisputable catalyst for its soaring stock price. Numbers don't lie. Tesla's Q4 numbers help to present a more vivid picture of the company's overall performance in 2019. Now, after some time to digest Q4, let's take a moment to analyze how Tesla is tracking as we move ahead in 2020. 

Above: Colin Rusch of Oppenheimer explains his rationale for raising his price target on Tesla (YouTube: CNBC Television)

Without a doubt, the lower-priced Model 3 has become the company's primary catalyst bringing Tesla to the masses. When Model 3 deliveries started in 2017, the company only aimed to deliver 100,000 cars in total (including the S and X). Later, in 2018, Tesla delivered 237,850 Model S, 3, and X — that's more than +100% growth year-over-year (YoY).

With these data points in the rearview mirror, compared to 2018, Tesla delivered 367,200 cars in 2019 (growth of +54.3%) and now the company is expected to expand further in 2020 as Gigafactory Shanghai goes full throttle with Model 3 and Model Y production. And if Tesla Model Y production kicks off according to plan, it's conceivable around half a million global deliveries could be in the works (see table 1.2 below).

Tesla's growth from the first to the last quarter of 2019 pushed massive deliveries of the Model 3. In Q3, we saw a -1.4% decline in Model S and X deliveries but in Q4 it surged to +11.7% compared to Q3 2019. Let's look at table 1.1 below which showcases Tesla's production and deliveries growth (QoQ compared with 2018).

Above: Table 1.1:  Tesla Model 3, S, and X Production and Deliveries QoQ, 2019 (Source: Tesla Investor Relations, compiled by X Auto)

In retrospect, it's evident that Tesla surprised Wall Street analysts in Q4 with the company's production and delivery numbers. Rusch and others have pivoted to a more bullish outlook. Looking back, in February 2018, Tesla CEO Elon Musk set the higher end expectation of Tesla deliveries to be 400k cars — but Tesla beat Wall Street's expectations reaching the company's lower end expectation (which was 360k) as the Silicon Valley automaker surpassed that number thanks to record Q4 deliveries.

Above: Table 1.2: Tesla Model 3, S, and X Production and Deliveries YoY, 2019 vs. 2018 (Source: Tesla Investor Relations, compiled by X Auto)

Of special note: Tesla Model 3 deliveries actually spiked as a whole +117% compared to 2018 (see table 1.2 above for detailed numbers) — this exponential growth in Model 3 deliveries resulted in the automaker's overall delivery numbers experiencing growth of +54.3% when compared to the previous year's numbers.

With Model Y and Semi Truck planned for production (possibly sooner than expected) in 2020, Tesla's production and delivery numbers are likely to show continued growth. And that's not all. The forecast for 2020 appears to hold many unique opportunities for growth.

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Written by: Iqtidar Ali. An earlier version of this article was originally published on X Auto.