Tesla Stock Wavers as EV Demand Rises Before Roadster Debut

Tesla stock closed at $377.33 on Sept. 24 as investors assessed mixed electric-vehicle demand data. The shares fell 0.73% during the session after closing at $380.12 one day earlier. Tesla remained well above its late-July lows despite the latest pullback.

Investors also watched President Donald Trump’s state visit with Chinese President Xi Jinping. The White House hosted Xi and Madame Peng Liyuan for a state dinner on Sept. 24. However, the diplomatic event does not independently explain Tesla stock’s daily move.

Tesla Stock Gets Support From Stronger European EV Demand

Tesla stock has surged in the past few weeks, helped by the rising hopes that people will embrace electric vehicles as gasoline prices jump. The average gasoline price has jumped to $4.4825, while diesel has soared to $6.5 in the United States.

These prices have jumped because of the ongoing US-Iran, Saudi Arabia-Houthi, and Ukraine-Russia wars have continued.

Therefore, people may start embracing EVs at a faster pace. Recent data confirm this view. A report released this week showed that European EV sales have surged in the past few months. They rose by over 52% in August, a notable thing since Tesla is the biggest player in Europe’s EV business.

The report confirmed another Bloomberg report that the company was boosting its German operations. It is also hiring over 1,000 more workers, even as Volkswagen lays off thousands of people.

The same situation is happening in the United States. A recent report showed that US EV sales rose in August from a year earlier. They, however, dropped sharply from a year earlier because customers rushed to buy EVs last year ahead of the ending of the Federal tax credit.

Tesla also reported strong vehicle deliveries in the last quarter. It sold over 480k vehicles after making 450k during the quarter. This surge coincided with a rally in gasoline prices, with gasoline peaking at over $5 as the crisis escalated.

Tesla to Launch Roadster Next Week

The next important catalyst for Tesla stock will be the launch of Roadster, which has been delayed for years. This launch is expected next week, with the company producing a limited number of vehicles.

The other crucial catalyst to watch will be the release of its third-quarter deliveries, scheduled for early next month. Analysts believe the company’s deliveries performed relatively well, with China the main laggard. Goldman Sachs analysts see the company delivering 435k vehicles, while the Bloomberg consensus is that the company delivered 466k.

Tesla’s revenue is expected to do well in the third quarter. It is expected to come in at $27.5 billion, down by 2.1% from a year earlier. The decline will be because of the surge that happened in the same quarter last year, ahead of the end of the tax credit. Its fourth quarter revenue is expected to surge by 14.4% to $28.5 billion, with the annual figure coming in at $106 billion. Chances are that the company’s real revenues will be higher than expected.

Tesla Stock Price Technical Analysis

The daily chart shows that the TSLA stock has rebounded in the past few weeks. It has jumped from a low of $297 in late July to the current $380.

The stock has formed an ascending channel and is now at the middle line. It has jumped above the 50-day Exponential Moving Average (EMA). Also, the Relative Strength Index (RSI) and the MACD indicators have continued rising.

Therefore, the stock will likely continue rising as bulls target the key resistance level of $400. A drop below the 50-day EMA at $362 will invalidate the bullish outlook.

This article is for informational purposes only and does not constitute financial or investment advice. Equity investments involve market risk.