Surprising China news sends Tesla stock soaring todayheadline

Tesla stock has taken its fair share of hits over the years.

The company’s CEO, Elon Musk, has been praised and criticized for his mercurial nature, and as a result, Tesla’s stock price has popped and dropped many times over the past decade.

Elon Musk’s backers celebrate his efforts to advance the electric vehicle market into the mainstream. His detractors point out broken model launch timelines and promises surrounding autonomous vehicles.

Recently, Musk’s decision to spend hundreds of millions supporting President Trump’s election and spearhead the Department of Government Efficiency, or DOGE, an organization in the executive branch tasked with cutting costs, has ramped up the debate.

Musk’s political positions have disappointed many long-time Tesla supporters, leading to sagging sales in key markets in Europe, China, and states like California.

The slowing sales in those markets and questions surrounding whether he’s too distracted to run Tesla have caused the stock to tumble over 50% from its highs in December to its recent mid-March low. 

Fortunately, however, shares appear to have found their footing, rising over the past week, including an over 11% surge higher on March 24 following important news out of China.

Tesla looks to technology to solve its problems

Tesla’s  (TSLA)  success stems from Elon Musk’s decision to focus its electric vehicles on performance. Rather than developing and marketing solely environmentally friendly vehicles, Musk built high-performance luxury cars to rival Mercedes Benz and Porsche.

The strategy turned Teslas into aspirational cars coveted by celebrities and speed enthusiasts, catching rivals, including Ford and General Motors, off-guard.

Nowadays, however, Tesla’s advantage has shrunk.

Almost every car company in the world, including Detroit’s big three, has spent billions creating their own EVs. Many of them offer similar performance and arguably better fit-and-finish than Tesla.

This has crimped Tesla’s market share in the electric vehicle market, a problem compounded by Musk’s often polarizing political actions.

In February, China Passenger Car Association data showed Tesla wholesale sales, including exports and retail sales, dropped 49% year-over-year. Tesla sold 30,688 new energy vehicles (NEVs) in China last month, the least in over two years. Chinese EV rival BYD sold 318,233 vehicles.

It’s a similar situation in Europe. Tesla’s sales in Europe slumped 45% in January while the overall industry sales rose 37%. The German Federal Motor Transport Authority said sales collapsed 76% in February to 1,429 cars, despite a 31% bump up in electric vehicle registrations.

In the U.S., Tesla sales slipped 1% in 2024, the company’s first annual sales drop in over a decade. According to the Cox/KBB quarterly EV sales report, Tesla units sold only increased by 2.3% in the fourth quarter, while total EV units sold rose by 15%. Ford sales rose 16% for perspective, while General Motors brands Cadillac, GMC, and Chevrolet all notched growth over 100%.

Tesla gets good China news, Trump bump

On March 24, Tesla said on its Weibo account that it will launch Full Self-Driving (FSD) in China once it wins a regulatory OK for over-the-air software updates. 

Previously, Tesla planned an FSD trial between March 17 and April 16. However, regulations requiring the approval of the regulatory software update were introduced in February, causing speculation that Tesla’s FSD plans there would be impacted.

In the U.S., Musk said in January that unsupervised FSD would launch in Austin in June 2025, with more cities to follow over time. 

The potential near-term arrival of FSD could spark interest in Tesla and help it offset some of its recent sales declines. As a result, shares rallied nearly 12% on the news.

Comments by President Donald Trump also contributed to the gains. Stocks have been under pressure this year due to concern that a strict and wide-ranging tariff policy could pressure the U.S. economy, further weighing on EV sales. 

Reports that the White House may exclude some countries from reciprocal tariffs set to begin April 2 and that Trump is weighing avoiding sector-specific tariffs on autos also fueled the rally. 

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