Why Tesla Stock Bounced Higher on Tuesday
December was initially looking quite gloomy for Tesla (NASDAQ: TSLA) stock, but on Tuesday, the world's largest automaker by market cap saw an uptick in price. Shares of the bellwether electric vehicle (EV) company rose by nearly 1.5% on the day. Investors weighed several pieces of news in both the EV space generally and regarding Tesla specifically, ultimately deciding the positive trumped the negative.
A fellow EV maker posted an encouraging quarter
It seems the most impactful event occurred with a major Tesla peer. China's Nio reported its third-quarter results, revealing still robust (46% year-over-year) growth in EV sales. Net losses -- both according to GAAP and non-GAAP (adjusted) standards -- were deeper than they were in the year-ago period, but not worryingly so.
The main takeaway is that demand for EVs remains robust in China's huge market, a good sign for next-generation vehicle makers anywhere in the world.
Investors also seem to be getting over their skepticism about the impact of the Cybertruck, Tesla's electric pickup, which has begun rolling out of the factory after a series of delays.
The Cybertruck is pricier than it was initially expected to be, and it apparently won't start to contribute meaningfully to the company's results until 2025, but at least it's finally hitting the road. Meanwhile, the buzz around it -- negative though it might be at times -- helps keep Tesla in the headlines, and fuels curiosity about the new vehicle.
The Cybertruck likely won't be a flop
While consumer acceptance of the Cybertruck might be slow in coming, it's sure to find at least a niche customer base given its novelty (not to mention Tesla's fame and popularity). Meanwhile, drivers around the world continue to be excited about EVs, a situation that should keep the Teslas of our times humming along quite nicely.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nio and Tesla. The Motley Fool has a disclosure policy.
