Tesla stock has rebounded in the past few weeks, moving from a low of $297 in August to the current $380. It has rallied as traders buy the recent dip and predict more gains as gasoline prices jump. So, will these gains hold?
European EV sales are soaring
The ongoing shock in the energy market may benefit companies in the electric vehicle industry, including Tesla. That’s because gasoline and diesel prices have soared significantly this year, with the latter hitting a record high.
This surge may push more people to embrace electric vehicles, which tends to have lower maintenance costs. This trend is already happening in Europe, where a report released today showed that registrations soared by 52% in August. Germany, where Tesla is boosting production is leading the charge.
Tesla is a top beneficiary in this shift since Model Y is the best-selling EV in Europe. The cheaper Model 3 is the third one after Skoda Elroq. As such, there is a likelihood that Tesla’s vehicle deliveries in the third quarter will be high.
The same trend is happening in the United States, where Tesla is a leading player. A report by KBB showed that new EV sales rose by 2.5% in August from July. The sales were down by 46% from a year earlier as buyers rushed to take advantage of the $7,500 EV tax credit. According to the EIA, more than 25% of all vehicles sold in August were electric.
The most recent data showed that the transition to EVs is accelerating as Tesla delivered over 480,000 after making 450k. Its deliveries were up by 25% from the same period last year.
Tesla’s main challenge is China, a country where competition from companies like BYD, Nio, and Xpeng has surged. It is estimated that Tesla’s wholesale sales rose by 3.5% YoY and fell by 7.92% from July. China is also experiencing higher costs and a reduction in government support for clients.
Next catalysts for TSLA stock
Looking ahead, Tesla stock will react to the Donald Trump and Xi Jinpingmeeting in Washington. This meeting is important because Xi is expected to push for the US to allow Chinese vehicle manufacturers in the country. In a recent statement, a lobby group representing US automakers said that this should not happen because it would affect their businesses.
The next key catalyst for the stock will be next week event, in which the company will unveil its long-delayd Roadster vehicle. This vehicle may help to boost its sales in the US.
The company will also release its third-quarter sales numbers soon. Analysts expect the upcoming results to show that its Q3 revenue dropped by 2.11% to $27 billion. For the year, the hope is that its sales rose by 12% to $120 billion.
Tesla stock price technical analysis
Tesla stock chart | Source: TradingView
Technicals suggest that the ongoing Tesla stock recovery has peaked. The daily chart shows that the stock peaked at the 200-day Exponential Moving Average (EMA). This price has coincided with the highest point on September 3rd this year.
Also, the stock has completed filling the fair value gap that happened in July when it published its financial results. It has also formed a doji candlestick pattern. Therefore, the stock will likely retreat, potentially to $350 in the near term.
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