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Despite an important announcement of volume production of the Semi trucks, Tesla (TSLA) stock is down today after hitting $1000.
Tesla Inc (NASDAQ: TSLA) stock soared on Wednesday following an announcement by the chief executive officer of the company Elon Musk. Musk told the staff of Tesla that it is time to scale up the production of the Semi, its medium-class electric truck. Recently, Musk in a tweet said yes when asked if Tesla is poised to volume produce the Semi.
Tesla shares rose by 6% hitting $1000. This makes it the second most valued auto marker after Japan’s Toyota Motor Corp (TYO: 7203). The surge in the market price would likely lead to another stock compensation for the company’s shareholders.
However, today TSLA stock started the day with a drop of 3%. Now the shares are trading at $990.20.
More Room for Gain alongside with Tesla Semi Truck Production
In an earlier call, Tesla shares got a boost from Wedbush which projected that the company’s shares could be valued more than $1000 adding that there is more room for a bullish run. Furthermore, an anticipated unveiling of a new “million-mile” battery capable of delivering longer life at a lower cost by Musk could be instrumental to the rising value of Tesla shares.
According to a tweet by Musk, the production of the battery and its powertrain will take place at a factory in Giga Nevada. This will enable Tesla vehicles to deliver a higher range at a lower cost.
The company is working on building a new factory. An insider source said that plans are in top gear to find location for the planned factory. The source who does not want to be named said that Texas is a likely location even though Oklahoma is lobbying for the investment.
In 2017 when Musk launched the Semi he hinted that the battery-powered Class 8 truck would go into production by 2019. The anticipated volume production has since been shifted to 2021. It is not surprising that the Tuesday announcement resulted in a surge in the market price of Tesla shares.
Tesla Rival Makes Gains
Interestingly the announcement coincided with the appreciation of the share price of Nikola Corporation (NASDAQ: NKLA) another truck maker involved in the manufacturing of electric trucks and a Tesla rival.
Nicola recently merged with VectoIQ, a special purpose acquisition company and has since this month traded on the Nasdaq. This makes it one of the electric truck makers listed. Nikola shares have doubled in price in the past week as the company plans a launch of its electric pick-up truck that rivals Tesla’s Cybertruck.
The Tesla rival in a joint venture partnered with CNH Industrial IVECO, the commercial truck maker to build an electric truck line named Nikola Tre. IVECO announced that demand for its electric truck which is due for production next year is high. The company announced on Wednesday that a former Tesla executive Mark Duchesne as joined its team to lead the manufacturing process.