Elon Musk richer by $2.1bn on back of Tesla's record sales

Electric vehicle maker started rolling off Model 3 sedans from its first plant outside of the US in Shanghai on December 7

Elon Musk, chief executive of Tesla, has a net worth of $28.8bn, according to Forbes. EPA

Elon Musk the billionaire chief executive of electric vehicle manufacturer Tesla earned $2.1 billion (Dh7.7bn) last week, as the company started to sell Chinese-built Model 3 sedans.

Currently the 34th richest person in the world, Mr Musk has a net worth of $28.8bn, according to Forbes.

The company’s stock rose almost 8 per cent last week, zooming to a record $478.15 a share on Friday. Tesla's shares have climbed more than 45 per cent since November last year, when they were trading at $329.40.

The California-headquartered company’s stocks rocketed making it the world’s most valuable car maker by market capitalisation after it announced the delivery of a record 112,000 vehicles in the last three months of 2019, significantly more than investors’ expectations. Overall, the company sold 367,500 vehicles globally last year.

By comparison, Ford sold more than 1.4 million vehicles in the first nine months of 2019, while General Motors sold 6.4 million.

Record sales of vehicles raised the market capitalisation of Tesla to $85.8bn on Friday – $1.2bn shy of the combined valuations of industry giants Ford and General Motors, which are currently valued at $36.8bn and $50.2bn, respectively.

On Tuesday, the automaker’s market cap hit almost $83bn, surpassing the Ford’s market value of $81bn in 1999, according to Dow Jones market data.

Tesla is currently rolling off Model 3 sedans from the Shanghai plant – its first outside the US. Success in boosting sales in China could propel Tesla to as high as $500 a share, Morgan Stanley analyst Adam Jonas said in a December note.

The Shanghai plant, first unveiled in July 2018, is part of Tesla’s plans to strengthen its presence in the world’s largest EV market and lessen the impact of the US-China trade war. It currently produces about 1,000 cars a week, a figure it aims to double this year.

“We believe Tesla’s ability to ramp production and demand in the key China region during the course of 2020 will be a major swing factor on the stock,” Wedbush Securities analyst Daniel Ives wrote in a note.

Last month, the Model 3 was also included in a list of models qualifying for an exemption from a 10 per cent purchase tax in China.

The China-built model also qualified for a government subsidy of up to 25,000 Chinese yuan per vehicle, offering another boost to Tesla.

Tesla led the EV market in the third quarter, taking 20 per cent of the global share, Counterpoint said.

It was followed by Chinese car makers BAIC Group at 10 per cent and BYD Auto at 9 per cent. German car-maker BMW had an 8 per cent share of the market.

Tesla is expected to report an adjusted profit of $1.53 a share on sales of $6.9bn in the last quarter of 2019, according to analysts polled by FactSet, a Connecticut-based financial data and software company. The company reported a profit of $1.93 a share on sales of $7.2bn in the last quarter of 2018.