By Abhirup Roy
SAN FRANCISCO (Reuters) – Tesla stock shot up nearly 12% in pre-market trade on Thursday, a day after it forecast surging car sales growth, reassuring investors that CEO Elon Musk was still looking to expand the company’s core business of selling electric vehicles.
The stock jump set the company up to add around $80 billion to its market capitalization, making up for a recent erosion in value caused by concerns that Musk was distracted by new projects like the recently unveiled robotaxi, which he has said will drive future growth.
Musk has been pivoting Tesla into an artificial intelligence and robotics company from an EV market leader, but has yet failed to lay out a detailed business plan for his new focus.
Last quarter, he made bold company announcements about everything but cars – from driverless taxis to humanoid robots – leaving investors worried about dwindling margins already squeezed by lowered prices.
On a post-earnings call on Wednesday, though, Musk forecast 20% to 30% sales growth next year, promising an affordable vehicle, and said efforts to slash production costs boosted margin.
“He definitely seemed more passionate and invested in it this time,” said Jessica Caldwell, head of insights at car research and buying website Edmunds.
“I feel like so much of Tesla is tied up in the future but we need to figure out how you get there. That’s what people needed to hear and they were a little bit better in providing those details than they have been in the past.”
The results followed a flashy event this month to unveil a two-seater robotaxi dubbed Cybercab that will go into production in 2026 without a steering wheel or pedals and cost less than $30,000 to buy. The event also featured a 20-seater driverless van and humanoid robots that danced for attendees.
Disappointed by the lack of some key details on how quickly Tesla could ramp up robotaxi production and clear inevitable regulatory hurdles, investors punished the company’s stock after that event.
Musk on Wednesday said Tesla aims to produce at least 2 million Cybercabs a year.
Not all investors are likely to be mollified by Tesla’s reassurances on Wednesday.
Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a prominent Tesla investor, said robotaxis and AI were not the fundamental businesses he wanted Musk to focus on.
“The days were good when Elon slept at the factory. He was there every day, working. Not going on Trump rallies of all things he could be doing,” Gerber said, referring to Musk’s well-publicized support of the Republican presidential candidate. Gerber made a short-lived run for the Tesla board last year.