What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) fell 3.1% in the afternoon session after reports surfaced of another month of declining sales in Europe, where the company was outsold by a key competitor.
Data from the European Automobile Manufacturers' Association showed Tesla sold 8,220 cars in the European Union in August, a drop of about 37% from the same month a year prior. For the year-to-date, Tesla's sales in the region had fallen 43%. In sharp contrast, Chinese competitor BYD sold 9,130 vehicles in August, a 201% increase, marking the second consecutive month it surpassed Tesla's sales in Europe.
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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 about 22 hours ago when the stock gained 3.9% on the news that it received a wave of positive commentary from Wall Street analysts and upbeat forecasts for third-quarter vehicle deliveries.
Wolfe Research stated that the electric vehicle maker's Q3 deliveries could reach between 465,000 and 470,000 units, topping consensus estimates of 445,000. The firm partly attributed the potential lift in volume to consumers speeding up purchases before a $7,500 federal EV tax credit expired.
Adding to the positive sentiment, Piper Sandler's Alexander Potter raised his price target to $500 from $400, highlighting Tesla's strength in artificial intelligence. Similarly, Baird analyst Ben Kallo upgraded the stock to a “Buy.” One prominent analyst, Dan Ives, forecasted that the company's march to a $2 trillion valuation had begun, driven by opportunities in AI and autonomous Robotaxis.
Tesla is up 12.8% since the beginning of the year, but at $427.83 per share, it is still trading 10.8% 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 $3,151.
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