Tesla regains $55 billion in market value after promising acceleration in cheaper models

The electric car manufacturer Tesla closed more than a tenth higher, despite a weak quarterly report. Investors hope for the soon arrival of a very cheap mass-market model that will allow the company to maintain its pioneering lead.

At the close of trading in New York, Tesla was trading

12 percent higher to $ 162.13, good for almost $ 55 billion in regained market value. This means that the symbolic milestone of 500 billion dollars has been successfully reached again: the company now has a market value of 508 billion dollars.

The upsurge is a welcome boost. On Tuesday evening, the company was still more than 40 percent below New Year’s level. This made Tesla the worst-performing member of the broad American barometer S&P500 this year.

The upswing looks a lot like a relief rally. Analysts have been concerned in recent weeks whether the company would shelve plans for a cheap model – commonly called Model 2 – to focus more on a self-driving robot taxi. “Model 2 is a large part of our volume forecast for Tesla through 2030,” Barclays analyst Dan Levy said previously.

During the analyst call after the figures, CEO Elon Musk indicated that the cheaper version for the general public is in line with the plans for self-driving robot taxis. ‘The core of our story is that we eventually want to have a lot of cars on the road that can drive autonomously.’ A large fleet of cars also provides a large amount of driving data, which can serve to make autonomous driving possible more quickly.

What also helps is that Tesla is marketing itself as a way to capitalize on the optimism about artificial intelligence, because the car manufacturer is investing heavily in it. The company purchased a lot of AI chips and now has ‘no obstacles’ left for training AI models. Musk says that Tesla has now come a long way in applying AI models, after the company first developed its own hardware – the so-called FSD chips – on which those models can run. ‘FSD’ stands for ‘Full Self-Driving’.