what happened
Shares of Tesla (NASDAQ: TSLA) rose Tuesday and rose 6.8% from 11:40 a.m. EST.
Shares in the growth stock are likely to trade higher due to a rough day in the overall market and a remark from analysts to investors who say that Tesla competitor and Chinese manufacturer of electric vehicles NIOsay (NYSE: NIO) the unveiling of its electric sedan made no impression.
The gain of Tesla shares on Tuesday magnified the recent bearish run, which cooled on Monday when shares took a breather. The share has now risen by 22% in 2021 and by about 800% over the past 12 months.
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Approximately
NIO’s new ET7, the company’s first sedan model, is ‘good, but not enough to make critical changes to Tesla’s challenge,’ he said. Citi analyst Jeff Chung, Tuesday in a note to investors. The new ET7 is expected to start delivering in 2022.
In addition, a possible overhaul of the design of Tesla’s Model S could be a headwind for NIO, the analyst said. And Tesla’s Model Y SUV is well positioned to compete with NIO’s EC6 model.
While the news about Tesla’s strong competitive position may be a factor that could help the stock today, another reason why stocks are higher is probably the broader market optimism. At the time of writing, the Nasdaq Compound is 0.3% higher.
Now what
Some investors may have been concerned that NIO could seize the Tesla growth opportunity in China. But Chung’s remarks suggest that Tesla is a tough competitor to China’s own electric vehicle businesses.