Tesla roars back with a 12% surge; but is the recovery for real?
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After weeks of relentless selling pressure, Tesla shares staged a sharp rebound, soaring 12% on Monday in a broad-based rally across U.S. equities. The stock was the best performer among the so-called “Magnificent 7,” outpacing gains in Meta (+3.79%), Amazon (+3.59%), and Nvidia (+3.15%). The outsized move reflects a wave of pent-up demand, finally unleashed as sentiment turned slightly more constructive around the name.
Tesla's outperformance comes after a prolonged selloff driven by internal restructuring and ongoing controversies surrounding CEO Elon Musk, including aggressive cost-cutting and department-wide overhauls. Investors appeared ready to re-enter the stock at depressed levels, sparking the single-day surge. Yet, despite Monday's move, the broader picture remains fragile. Prior to the rally, shares were still down over 50% from their January highs and had logged nine consecutive weeks of losses — the longest losing streak since Tesla's 2010 IPO.
Fundamentally, challenges persist. Delivery volumes have been underwhelming, with January sales in key European markets plunging over 50%, and February sales down 40%, according to Bloomberg. This demand softness is being compounded by growing competitive pressure, particularly from Chinese EV giant BYD. The automaker reported a 34% jump in net profit for the fiscal year and a 29% rise in revenue, hitting $38.1 billion — well above Tesla’s latest quarterly revenue of $25.7 billion. BYD also delivered 1.5 million passenger vehicles last quarter, including 595,000 fully electric units, outpacing Tesla’s 496,000 EVs in the same period. With its mix of EVs and plug-in hybrids, BYD has now outperformed Tesla for two consecutive quarters.
The recent rally may offer short-term relief, but Tesla remains under structural pressure. Weak delivery trends, intensifying global competition, and uncertainty around leadership execution all pose headwinds to a sustained recovery. Traders and investors should monitor volume trends, margin resilience, and delivery guidance closely in upcoming quarters to assess whether this bounce marks the beginning of a true reversal or just a technical reprieve.
Tesla's outperformance comes after a prolonged selloff driven by internal restructuring and ongoing controversies surrounding CEO Elon Musk, including aggressive cost-cutting and department-wide overhauls. Investors appeared ready to re-enter the stock at depressed levels, sparking the single-day surge. Yet, despite Monday's move, the broader picture remains fragile. Prior to the rally, shares were still down over 50% from their January highs and had logged nine consecutive weeks of losses — the longest losing streak since Tesla's 2010 IPO.
Fundamentally, challenges persist. Delivery volumes have been underwhelming, with January sales in key European markets plunging over 50%, and February sales down 40%, according to Bloomberg. This demand softness is being compounded by growing competitive pressure, particularly from Chinese EV giant BYD. The automaker reported a 34% jump in net profit for the fiscal year and a 29% rise in revenue, hitting $38.1 billion — well above Tesla’s latest quarterly revenue of $25.7 billion. BYD also delivered 1.5 million passenger vehicles last quarter, including 595,000 fully electric units, outpacing Tesla’s 496,000 EVs in the same period. With its mix of EVs and plug-in hybrids, BYD has now outperformed Tesla for two consecutive quarters.
The recent rally may offer short-term relief, but Tesla remains under structural pressure. Weak delivery trends, intensifying global competition, and uncertainty around leadership execution all pose headwinds to a sustained recovery. Traders and investors should monitor volume trends, margin resilience, and delivery guidance closely in upcoming quarters to assess whether this bounce marks the beginning of a true reversal or just a technical reprieve.