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In February, Tesla produced 23,632 cars and delivered 18,300 vehicles, which marks an 18% increase from the month before, when it sold 15,484 vehicles locally after exporting an estimated 7,956 cars from Gigafactory Shanghai.
Shares of electric vehicle leader Tesla Inc (NASDAQ: TSLA) surged by 19.64% on Tuesday, closing at $673.58. In the pre-market, Tesla stock added another 1.99% to $687. Such an increase not only added more than $100 billion to Tesla’s market capitalization but also put an end to a five-day streak of losses for the company. During the plunge, Tesla lost a quarter-trillion in market cap, with its CEO Elon Musk losing $27 billion. Now, TSLA stock seems to be recovering, mostly due to reports about the expansion of Tesla’s market share in China and its sales increase.
Tesla’s Growing Market Share in China
According to Wedbush analyst Daniel Ives, Tesla produced 23,632 cars and delivered 18,300 vehicles, which marks an 18% increase from the month before, when it sold 15,484 vehicles locally after exporting an estimated 7,956 cars from Gigafactory Shanghai.
Such results are impressive, considering that Tesla Gigafactory in Shanghai was in operation for just 21 days. February is a 28-day month, seven of them is the Lunar Festival, or Chinese New Year. During these nationwide celebrations, companies like Tesla have to take a mandatory break.
As per China Passenger Car Association (CPCA), sales of passenger cars in February 2021 more than quadrupled in comparison with February 2020 and totaled around 1.2 million vehicles. Notably, among the major car producers in China, Tesla managed to surpass BYD Company (OTCMKTS: BYDDY), Nio Inc (NYSE: NIO), Xpeng Inc (NYSE: XPEV), and Li Auto (NASDAQ: LI) that saw sales declines.
Wall Street Bullish on TSLA Stock
As Daniel Ives has stated, February has been “quite impressive” for Tesla. He added that the company is “on a strong trajectory into March”. For the full 2021, Ives estimates that Tesla will deliver more than 200,000 vehicles in China. Besides, he believes Tesla’s stock price could reach as high as $950.
As Ives explained, TSLA stock surged resulted from the price cuts and introduction of the Model Y in China that changed the market dynamics for Tesla. He said:
“We believe price cuts and the Model Y introduction were key to some of these changing market dynamics in China. That said, overall EV demand in the region looks robust with EV penetration set to go from 4.5% in China for 2020 to 10% by 2022 in this EV arms race with Tesla and its Giga footprint front and center.”
According to another Wall Street analyst Pierre Ferragu, now it is a good time for buying Tesla shares. He raised the price target for the stock from $578 to $900 as well as upgraded the rating to “buy” from “neutral”.
Even the well-known UBS analyst and Tesla skeptic Patrick Hummel changed his mind and more than doubled his Tesla stock price target from $325 to $730. Above all, he said that “Tesla has the potential to become one of the most valuable software companies”.