What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 2.8% in the afternoon session after the company reported its best wholesale month of the year in China and a surge in sales in Turkey for August.
In China, the electric vehicle maker sold 83,192 vehicles, a 22.55% increase compared to July. The company also saw sales soar in Turkey, where it sold 8,730 Model Y vehicles, an 86% jump from July, making it the second-best-selling brand in the country. This strong performance in key international markets appeared to outweigh reports of an underwhelming launch in India and ongoing sales declines in some European markets.
Separately, Salesforce's CEO Marc Benioff provided positive updates on Tesla's robotics efforts after visiting the company's factory. Sharing a picture of Tesla's Optimus bot on X, he added, "Amazing what [Tesla CEO Elon Musk] is doing to create the future."
After the initial pop the shares cooled down to $335.86, up 2% from previous close.
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What Is The Market Telling Us
Tesla’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 4% on the news that markets pulled back with the decline concentrated in the tech space as investors engaged in profit-taking following a robust week that saw the S&P 500 hit a new record.
Adding to the pressure, new inflation data, specifically the Core PCE, showed an acceleration in July, signaling that rising prices remain a risk despite being in line with expectations. This confluence of factors, including market highs heading into a historically weak September, led to a pullback, with the Nasdaq Composite shedding 1.15%. While the Federal Reserve has hinted at potential rate cuts, the focus on inflation and the jobs market continues to influence investor sentiment.
Also, a recent study suggested that consumer demand for the company's Full Self-Driving feature is weaker than believed, raising questions about a key potential growth driver. Lastly, new data from the European Automobile Manufacturers Association revealed a 40% year-over-year drop in Tesla's car sales in Europe for July.
Tesla is down 11.4% since the beginning of the year, and at $335.86 per share, it is trading 30% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $2,476.
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