The Tesla Inc (NASDAQ: TSLA) share price continued its incredible run overnight.
The electric vehicle manufacturer's shares finished the day 20% higher at US$780.00 after briefly hitting a record high of US$786.14.
This latest gain means the Tesla share price is now up a massive 81% since the start of the year.
Why is the Tesla share price rocketing higher?
Investors have been fighting to get hold of Tesla's shares following the recent release of its fourth quarter update.
During the fourth quarter Telsa reported record vehicle deliveries and revenue and earnings that came in well ahead of the market's expectations.
Vehicle deliveries in the fourth quarter came in at 112,095, bringing its total deliveries over the 12 months to almost 368,000. This represents a year on year increase of 50% and was in line with its guidance for total deliveries of between 360,000 and 400,000 in 2019.
The main driver of its growth was its lower-cost Model 3 vehicle. Strong demand from customers led to the Model 3 accounting for 82% of Tesla's deliveries in 2019. This compares to 59% during the prior year.
These strong deliveries ultimately led to Tesla generating a sizeable US$1 billion of free cash flow during the fourth quarter. This was up from US$910 million a year earlier and US$371 million in the third quarter.
Pleasingly, further growth in deliveries is expected in 2020. The company expects to comfortably exceed 500,000 units.
What else is driving the Tesla share price higher?
Also contributing to Tesla's rapid share price rise has been the view of many analysts that it should be valued as a tech company rather than a car company.
CNBC's Jim Cramer is one of those analysts. He recently described Tesla as a technology enterprise that makes cars, and suggested that investors must redefine it as such if they expect to accurately judge the stock.
He explained: "Tesla's not really a car company, it's a tech company on wheels. That's what keeps confusing people. Almost every major automaker now has an electric car, yet almost none of these cars have any demand to speak of at all, except for Tesla."
"Ford and GM are in the commodity auto business; stop comparing their market capitalizations to Tesla, which is a thousand times more proprietary. Instead, I think it makes more sense to think of them as a tech company … along the lines of Nvidia or AMD."
With its shares hitting a record high on Monday evening, it seems that many investors agree with this view.
