Tesla (NASDAQ: TSLA) may have brought its stock slide to a screeching halt today as shares surged on several bullish reports from China and financial analysts.
Shares opened at $608.18 after an impressive pre-market performance that sent the stock shooting up around 8%. Just a few hours into Tuesday’s session, shares continued to rally, up nearly 15% for the day, erasing some of the losses that investors have experienced over the past few weeks.
News that Tesla had performed well in China in February could be the main reason for the spike in price, especially as the country continues to be an area of extreme focus for EV manufacturers, not just Tesla. A highly competitive sector in its own right, Tesla proved to be in the mix of the most dominant as the China Passenger Car Association (CPCA) revealed Tesla sold 18,318 vehicles after producing 23,632. This showed an 18% growth from numbers in January that were not too favorable for Tesla, although decreased Chinese sales were mainly attributed to the export of some China-made cars to Europe.
Tesla is dealing with numerous competitors in China, including GM’s Wuling HongGuang Mini EV, which has been selling in large numbers lately. However, it is not a comparable vehicle to Tesla’s Model 3 or Model Y, as performance and range ratings for the GM vehicle are strikingly lower than Tesla’s vehicles.
On top of the news in China, New Street Research analyst Pierre Ferragu, a notable Tesla bull, raised his price target to $900 while also upgrading the stock toa “Buy” rating.
Indicating that Tesla’s recent stock surge was corrected by a shift in market outlook as the COVID-19 pandemic begins to cool off, Ferragu writes (via Reuters):
“As much as the market severely corrected the recent excesses of optimism reflected in Tesla’s valuation, our recent work strengthened our confidence about the solid outlook for the company in the next 2 years.”
Tesla has public plans to begin the operation of its Giga Berlin and Giga Texas production plants this year. On top of the new production facilities, the manufacturing efforts of Tesla’s Cybertruck, Roadster, and a $25,000 vehicle are all planned within the next few years. Tesla’s increasingly bullish outlook is based on the principles that its product lineup will continue to expand, and demand will continue to increase, making the automaker a prime candidate to emerge as the frontrunner for years to come.
At the time of writing, Tesla shares were up $83.58, or 14.85%.