Tesla's stock rallied in early morning trading, but by the end of the day, it gave back most of its gains.
After plunging last month to levels not seen since 2016, Tesla shares have been rebounding in recent days. And though a Tuesday morning rally wound up the day in negative territory by the time the final bell was rung, shares are still up more than 4% in recent days, giving the battery-carmaker a bit of a respite.
But whether the upturn will continue is far from certain, with analysts and investors anxiously waiting to see how Tesla’s second-quarter production and sales numbers fare. The automaker fell well short of its first quarter target, driving its bottom line deep into the red. CEO Elon Musk has signaled that the losses likely will continue for the current quarter, but he has also indicated that production and sales have been picking up.
Separately, Tesla bulls appear relieved by the 47-year-old entrepreneur’s newfound caution when it comes to using his Twitter feed. Musk has found himself in serious trouble on several occasions over the past year due to his tendency to say whatever comes to mind in his steady flow of tweets. Among other things, that has led to his removal as Tesla chairman and it had earlier this year raised the prospect he might also be forced out as CEO.
Tesla shares ended Tuesday trading at $224.74, a 29-cent, or 0.13 percent, decline for the day. That’s a sharp rebound from the lows of recent weeks that saw the stock tumble as low as $176.99. But it’s also a far cry from the 52-week high of $387.46.
(Tesla CEO Musk “deletes” Twitter account. Click Here for the story.)
Where it goes in the coming weeks is all but certain to be impacted by second-quarter production numbers. In an e-mail to employees sent May 22, Musk said the automaker was on track to produce 90,700 electric vehicles. That would top the previous record set during the final quarter of 2018.
“In order to achieve this, we need sustained output of 1,000 Model 3′s per day,” Musk said in the e-mail. “Almost all parts of the Model 3 production system have exceeded 1,000 units on multiple days (congratulations!) and we’ve averaged about 900/day this week, so we’re only about 10% away from 7,000/week.”
But a number of sources close to Tesla have been raising doubts about the prospects of setting a new production record.
That was echoed by analyst Dan Ives of Wedbush Securities, who told CNBC in an interview on Tuesday that getting to Musk’s early target of 360,000 to 370,000 vehicles this year would be a “herculean task.” His own target, the analyst said, is between 345,000 to 350,000 vehicles – which, nonetheless, would mark a full-year record.
(Click Here for more about Musk hyping Tesla’s performance, future to shareholders.)
Final production numbers for the second quarter are to be released on July 1, with earnings to follow at the end of the month.
There are other challenges for Tesla this year, not the least being Musk’s ability to live within his latest agreement with the Securities and Exchange Commission. After accusing him of misusing his Twitter account to release “material” information that could impact Tesla stock, the SEC settled on a deal that will require Musk to have his social media comments reviewed by the company’s attorneys if they include critical corporate information.
Musk, meanwhile, also faces an ongoing lawsuit filed by a British diver whom the executive accused of being a pedophile.
(Tesla workers less keen on EV maker than last year. Click Here for the story.)
Tesla itself has to deal with the launch of its new China plant, something expected late this year. And it is also set to reveal its first all-electric pickup while moving forward toward the launch of several other products, such as its Model Y utility vehicle, Roadster and semi truck.