One of the unsung stories of 2019 has been the u-turn in Tesla's (TSLA  ) stock. Since May 2019, it's up nearly 100% and is now 11% away from its previous all-time highs made in September 2017. It's remarkable that the company's improving fortunes haven't generated the same coverage as its spiral lower amid a deluge of headlines which included the company struggling to increase production, scary headlines about defects in cars, competitors catching up, and questions involving its purchase of SolarCity.

Of course, this doesn't mention the tabloid-level coverage and shenanigans of CEO Elon Musk including taunting the SEC, falsely tweeting that a company takeover was imminent, and smoking weed on a podcast to name a few incidents. These struggles translated into the stock dropping by almost 50% over a 20-month period.

Increasing Production

Despite the sensationalistic stories dominating coverage, the weakness in Tesla's stock was due to a much more mundane reason. The company had an exorbitant valuation and needed to show investors that it was capable of meeting its objectives. The primary struggle was increasing production while maintaining quality.

In September 2017, Tesla was valued at $65 billion. This is more than well-established companies like Ford (F  ) at $35 billion and GM (GM  ) at $53 billion. However, the key difference is that Tesla is delivering between 80,000 and 90,000 cars per quarter, while Ford is producing around 1.3 million cars per quarter and GM produces more than 2 million cars per quarter.

Clearly, it's a massive leap for Tesla, and the stock is already priced as if this leap will happen. Although it's obviously not certain that it will be successful. Production at the scale of millions of units per quarter versus Tesla's current production is a different type of challenge.

Tesla's Maturation

In some respects, the turbulence of the past couple of years marks the company's transition from adolescence to adulthood. The company has been able to thrive based on its potential and vision, but now it must do the hard work of turning these intangibles into tangibles.

Recently the company announced plans to build its fourth Gigafactory in Berlin, Germany. This will also include a design center as Tesla looks to increase production in Europe and tap local engineering and design talent. This move allows Tesla to become more competitive in European markets and also hedge against risks of the trade war getting worse.