Tesla Shares Rise After Elon Musk Teases a New Product

August 23, 2016, 3:54 PM UTC
Tesla Update v7.0 Enables Self-driving Test In China
Photograph by VCG via Getty Images

Tesla Motors Chief Executive Elon Musk said on Tuesday that the company planned to make a product announcement later in the day, sending the company’s share price higher.

“Tesla product announcement at noon California time today,” Musk tweeted.

The Silicon Valley electric car manufacturer declined to offer details before the announcement, but its shares were up $4.78, or 2.1%, to $227.71 in afternoon trading. SolarCity was also up on the news, rising 1.5% to $23.37.

SolarCity (SCTY) agreed to Tesla’s $2.6 billion offer to buy the solar panel installer earlier this month, clearing one obstacle in the way of Musk’s ambitious to create a carbon-free energy and transportation company.

Both companies are still trading below where they were when SolarCity’s approval for the deal was announced.

In May, Tesla (TSLA) said it was stepping up production plans for its upcoming Model 3 mass-market sedan and would build a total of 500,000 all-electric vehicles in 2018, two years ahead of schedule, but it warned that spending will ramp up as well.

Tesla earlier this month reported a steeper than expected quarterly loss on higher spending at its vehicle and battery factories, and said adjusted profitability could be within sight if the company meets its delivery goals.

The 13th straight quarterly loss for Tesla underscored the financial hurdles that hamper it while it takes on increasingly ambitious goals.

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Musk has previously tweeted planned product or company announcements that sent shares rising. In March 2015, he tweeted a “major new Tesla product line — not a car” would be unveiled the following month.

Tesla shares rose about 20% over the month before the announcement that the company was unveiling storage systems or batteries for homes, companies and utilities and expanding beyond electric vehicles.

On July 10, Musk tweeted plans to update his “master plan” that led to a jump in the stock price. But investors sent the stock down after some analysts said the master plan unveiled 10 days later came with hefty costs.

Reuters reported in July the updated master plan that includes developing an electric commercial truck, a public bus, a pickup, and systems to enable fully autonomous driving could cost $2 billion to $3 billion or more.

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