Electric car giant Tesla has seen its stock increase in value by almost 90% since the beginning of the year. While shares hit a low on March 18th, bottoming out at $361.22, it has quickly rebounded to $781.88 as of April 30th. But Tesla’s success is unique among auto makers.
The coronavirus pandemic has caused huge supply chain issues, affecting many automotive producers. In addition, demand for new cars is down, as people have less need to drive and less money to spare. Because of this two-pronged downturn, year-to-date General Motors stock is down 38% and Ford stock is down 43%.
Even with recent setbacks caused by coronavirus-related shutdowns in California, Tesla is advancing at lightning speed. The company even managed to turn a profit in a first quarter that left most companies groveling to investors.
So how has the company performed so well amid such a disastrous quarter for the automotive industry?
Tesla’s Chinese Business
The Tesla factory in Shanghai has been highly productive. Last month, the factory beat its own record, assembling 10,160 vehicles in March alone. Chinese auto sales are down by 43% overall, making the high production of Tesla’s Chinese sector even more impressive. Over the last few years, China has become an increasingly important player, making success in the country a good indicator of a company’s strength.
Widening its Lead in the Electric Vehicle Race
Adverse forces in an industry often separate the weaklings from the leaders. Tesla was already an established force in the electric vehicle (EV) industry, and the current pandemic came as many other car manufacturers were just beginning to enter the field. Now that COVID-19 lockdowns has made that transition more difficult for the less established, Tesla has widened its lead in the market.
Tesla’s success can’t be attributed solely to its vehicles. Tesla has created energy technology that has implications and relevancy across many industries. Investors might see future potential for such technology to make Tesla not just a force in the auto industry, but as a giant in big-tech as well.