Tesla shares surge 10% to record high after 2nd-quarter deliveries beat estimates

• Tesla shares continued their winning streak on Thursday after the company announced second-quarter delivery figures that beat analysts' estimates.
• Tesla delivered 90,650 vehicles in the quarter, while analysts had estimated 83,000 deliveries.
• The company's production levels were down 20% as the COVID-19 pandemic halted production at its factory in Fremont, California.
• Tesla said production at its Fremont factory had since been ramped up to pre-pandemic levels.
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Tesla surged as much as 10% to record highs on Thursday after reporting second-quarter delivery figures that blew past analysts' estimates.

Tesla delivered 90,650 vehicles in the quarter, well ahead of estimates of 83,000 deliveries. The company delivered 10,600 Model S and Model X vehicles and 80,050 Model 3 and Model Y vehicles.

While Tesla beat delivery estimates, the company's vehicle production at its factory in Fremont, California, took a hit because of the COVID-19 pandemic: It was down 20%, at 82,272 vehicles.

"While our main factory in Fremont was shut down for much of the quarter, we have successfully ramped production back to prior levels," Tesla said.

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Tesla added that the delivery numbers "should be viewed as slightly conservative" and could vary by up to 0.5% or more because it counts a car as delivered only "if it is transferred to the customer and all paperwork is correct."

Tesla's Thursday surge helped to solidify its leap past Toyota on Wednesday to become the world's most valuable auto manufacturer.

The Wedbush analyst Dan Ives said in a note published on Wednesday that demand for Tesla cars in China was rebounding.

"The clear standout this quarter is the massive underlying demand coming out of China as we have seen demand surge in China for Model 3's in this key region with Giga 3 firing on all cylinders despite the softness seen earlier in April," Ives said.

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Ives added that if Tesla delivered close to 90,000 vehicles, it could "put the bottom-line in the area code of breakeven, a jaw dropping feat in a dark macro and COVID backdrop for Musk & Co."

If Tesla managed to break even in the second quarter, it would be eligible for inclusion in the S&P 500. That could create demand for Tesla shares, as passive exchange-traded funds and mutual funds tied to the index would be forced to buy shares of Tesla.

Ives said that he expected Tesla to deliver upward of 450,000 vehicles for the year and that the bull case now calls for Tesla to rise to $2,000, representing potential upside of 64% from current levels.

Tesla is up more than 190% year-to-date. The company's meteoric rise has had investors searching for the next Tesla, leading them into smaller electric-vehicle manufacturers such as Nikola Motors and Workhorse, which owns a 10% stake in Lordstown Motors.

Tesla shares hit an all-time high of $1,229 in Thursday-morning premarket trading.

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