Tesla share price: what's the outlook after worst ever start to a year?
The electric car company faces delivery challenges and a tumbling stock price throughout 2019.
Tesla share price is slightly rebounding after the company's shares fell 43% this year. The electric car company’s stock is trying to recover after a worse-than-expected Q1 earnings report, struggles meeting vehicle shipment deadlines, and reports of declining auto sales.
Tesla shares rise after cutting vehicle prices
Tesla’s Model 3 sales jumped from 10,050 in April to 13,950 in May after the corporation cut the cost of the vehicle to $35,000. Chief executive officer (CEO), Elon Musk, noted in an email to employees that investors still supported Tesla despite reporting large losses in Q1.
‘It is important to bear in mind that we lost $700 million in the first quarter this year, which is over $200 million per month. Investors nonetheless were supportive of our efforts and agreed to give us $2.4 billion (our net proceeds) to show that we can be financially sustainable’, said Musk.
How will Tesla shares perform before manufacturing the Model Y in California?
Tesla hopes to increase sales with its upcoming Model Y sport utility vehicle (SUV). Musk said that the car company has restructured its Fremont, California factory to ramp up production of the SUV.
‘Right now our default plan actually is to produce the [Model] Y at Fremont. I was sceptical about whether this made sense at first, but my team convinced me the fastest way to get to volume production is to do the Y at Fremont,’ said Musk.
Cornerstone Macro technical analyst, Carter Worth, believes that Tesla shares have fallen so much that the stock is a buy for investors. Worth is taking a contrarian view of the stock.
‘Tesla has undershot by such an amount that actually it’s so bad, it’s good,’ said Worth.
Tesla has positive 2019 outlook
Despite Tesla's current challenges, the corporation has a positive outlook for 2019 vehicle deliveries. Tesla forecast 360,000 - 400,000 car deliveries for the year. The corporation also predicts 45-65% year-over-year growth in 2019.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets