What happened
Shares of electric-car maker Tesla (NASDAQ: TSLA) joined a broad-ranging stock market rally Friday to close the day 5.8% higher. There appeared to be three factors working in its favor.
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For one, on Friday, the U.S. Department of Labor reported that the U.S. economy added 312,000 jobs in December. That positive economic news sent many stocks soaring in Friday trading, and Tesla probably enjoyed a bit of an updraft, as well.
So what
But that wasn’t the only reason Tesla stock rose on Friday. In addition to the broadly positive economic news, Tesla stock, in particular, benefited from two news items that broke today. Specifically, Reuters reported that Tesla is set to begin shipping Model 3 electric sedans to Chinese customers in March. Tesla’s said to be planning a manufacturer’s suggested retail price (MSRP) of about $72,000 for the Model 3 in China — more than 20% above the average selling price of the car in the U.S.
Not long after that news was announced, Electrek reported that in the European market, Tesla already has booked 14,000 preorders for the Model 3 — and not just for any old Model 3, but for “the Model 3 Performance version and Dual Motor AWD version, which happen to be the most expensive versions of the vehicle.”
Now what
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When all these factors are taken as a whole, Friday’s big story is that investors can now look forward to a lot of new sales — and high-margin sales at that — to buoy Tesla’s revenue numbers in 2019. That hope tends to mitigate concerns over the company’s ability to keep its sales momentum going now that eligibility for the full $7,500 tax credit for Model 3 sales in the U.S. has run its course.
And that’s the real reason Tesla stock rose today.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.
