Tesla's share price surged on Wednesday, closing at a record $580.99 after the company released a string of positive news in its fourth-quarter financial results announcement.
The biggest takeaway is that Tesla has delivered its first annual profit since the company was founded in 2003. The final number came in at $35.8 million profit for 2019 thanks to a $386 million profit in the fourth quarter, though the figures are based on the accounting rules followed by most analysts and investors.
Using generally accepted accounting principles, Tesla still posted a loss for the year as the fourth-quarter profit came in at only $105 million under the stricter accounting rules.
Nevertheless, Tesla still has a bright future ahead. The company's Chinese plant only became operational in December and should help Tesla boost sales in what is the biggest market for EVs. The plant currently assembles the Model 3 but will soon add the Model Y.
Tesla Model Y
Tesla has also revealed that it has started production of the Model Y at its plant in Fremont, California. Deliveries of the small SUV are expected to commence in March.
With the arrival of the Model Y, Tesla said it expects to “comfortably exceed” 500,000 sales in 2020. That compares to approximately 360,000 sales in 2019, which helped Tesla achieve total revenues of $24.5 billion for the year.
Tesla also said its plans for a new plant near Berlin, Germany, remain on track and the first cars should be assembled there in 2021. The German plant will assemble the Model 3 and Model Y.
There are some headwinds, though. Tesla is just starting to face real competition in the EV space as the major automakers introduce their first credible rivals. And the new competition is arriving just as Tesla loses the federal tax credit on new EV purchases.