- Shares of Tesla traded above the key resistance level on Tuesday after the EV maker posted strong September sales growth in China.
- Tesla sold 56,606 vehicles in China last month, accounting for 27% month-on-month growth.
- The growth for Tesla occurred even as Chinese car sales declined by 17% in September.
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Tesla rose 2% to clear its key resistance level of $ 800 on Tuesday after the company announced significant sales growth in China for the month of September.
Tesla sold 56,006 Chinese-made vehicles, representing a monthly growth of 27% and the highest month of Chinese sales since production at its Shanghai factory began in 2019.
Tesla’s growth is impressive, as data from the China Passenger Car Association showed that overall vehicle sales fell 17% in September to 1.58 million. Of the 56,000 Chinese-manufactured vehicles sold in September, Tesla exported 3,853 of them.
The fall in September car sales in China was not much of a surprise due to the persistent semiconductor failure and recent regulations targeting electricity consumption in the country. And Tesla third-quarter car sales released earlier this month suggested continued strength for the automaker, with the company on track to nearly 1 million in annual car sales.
Wedbush analyst Dan Ives said the Chinese sales data means that recent dark clouds hovering over Tesla in recent months are starting to move into the rearview mirror.
“Selling 50k + a month for the key China region speaks to a huge trajectory that highlights our appropriate Chinese thesis for Tesla in the next few years,” Ives said in a Tuesday note, adding that “Tesla continues to dominate market share.”
Tesla’s Tuesday rise brought the stock to its highest level in eight months. A successive daily close above the 800-day resistance level would signal that risk appetite is growing in Tesla shares, with a reversal of its previous high probability.
Tesla surpassed $ 900.40 at the end of January, representing a potential top 12% of current levels. Since reaching its record high in January, Tesla fell to 40% before firing sideways as investors struggled with the shortage of chips and concerns about production. Shares of Tesla are up about 12% so far.