Tesla Shares Pop Following Report of Production Hike

Photo Credit: Jae C Hong/AP/Shutterstock
July 10, 2019

By Spencer Feingold

Tesla’s stock popped on Wednesday following reports that the electric car maker is ramping up production at its California factory.

The company is “making preparations” to increase output and hire additional workers, Jerome Guillen, Tesla’s president of automotive, said in a leaked internal email, according to a Bloomberg report Tuesday evening.

“While we can’t be too specific in this email, I know you will be delighted with the upcoming developments,” Guillen wrote, Bloomberg reported.

The leaked email comes just a week after Tesla ($TSLA) reported record production numbers with over 87,000 vehicles made and roughly 95,200 delivered in the second quarter of 2019.

“They’ve made a big step forward here,” Gene Munster, managing partner at the investment firm Loup Ventures, told Cheddar. “The facts are they’re making improvements to manufacturing and demand has rebounded.”

Tesla stock closed Wednesday up nearly 4 percent, and has risen over 13 percent in the last month. It has, however, been down nearly 29 percent since the start of 2019 due to investor concerns over demand.

“I want to be clear, there is not a demand problem. Absolutely not,” Elon Musk, the company’s CEO and founder, said at Tesla’s annual shareholder meeting in June.

The new hiring notice also follows a period of layoffs and high-profile turnovers at Tesla. In recent weeks, the company lost the vice president of production at its Fremont factory — where the production increase is expected to take place — its head of European operations, and vice president of interior and exterior engineering.

Nonetheless, analysts note that Tesla will continue to attract the top people in engineering.

“You don't go to Tesla if you want a cushy job, you go to Tesla if you want to change the world,” Ross Gerber, the president and CEO of the financial firm Gerber Kawasaki, told Cheddar.

“This is an enormous opportunity to Tesla … They’re blowing out numbers,” Gerber added. “We’re 100 percent believers that people want [electric vehicles] and they want good ones.”