Tesla Stock Looks Poised for Turnaround Despite Headwinds
After more than a month on the low, Tesla (NASDAQ:TSLA) appears to be finally staging a comeback. Yesterday, the Electric Vehicle (EV) giant's stock surged by an impressive 7%, the first noteworthy rebound rise following the dip prompted by the company's worse-than-expected earnings report on July 19th.
The stock has dropped almost 30% from its peak of around $300 in 2023 due to economic problems and pricing worries in China, a major electric vehicle market. Elon Musk, on the other hand, indicated he won't hesitate to lower prices to stay competitive.
Recent data from China showed Tesla's sales fell 31% last month compared to June, hitting the lowest point in 2023. However, Tesla's competitors in China reported increased vehicle deliveries.
Tesla's July decline, while rivals upped deliveries, was tied to a sales campaign in the previous year's final months. Bank of America analysts argued this price cut pulled demand forward instead of increasing sales volume.
Baird's upbeat outlook at the start of the week gave TSLA a boost. Analysts believe price cuts could positively impact the company's profit margins for the rest of the year.
Moreover, the Cybertruck launch and expectations of increased demand due to FSD (fully autonomous driving software) also contribute to Tesla's positive outlook. The company's energy business growth is seen as another driving factor.
Tesla's energy storage sector gained significant traction in 2023, reaching 7.5 gigawatts of battery storage per hour in the first half of the year, a nearly 280% increase. This boosted the company's non-core profit margin and overall sales.
However, despite these positive projections, Tesla will likely face challenges due to increased competition in the electric
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