Matt Rourke/AP Photo
- Shares of Tesla traded above the key $800 resistance level on Tuesday after the EV maker posted strong September sales growth in China.
- Tesla sold 56,606 vehicles in China last month, representing 27% month-over-month growth.
- The growth for Tesla came even as China auto sales slumped 17% in September.
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Tesla rose 2% to clear its key $800 resistance level on Tuesday after the company announced significant sales growth in China for the month of September.
Tesla sold 56,006 China-made vehicles, representing month-over-month growth of 27% and the highest month of China sales since production in its Shanghai plant started in 2019.
The growth from Tesla is impressive as data from the China Passenger Car Association showed overall vehicle sales drop 17% in September to 1.58 million. Of the 56,000 China-made vehicles sold in September, Tesla exported 3,853 of them.
The drop in September car sales in China wasn't much of a surprise given the ongoing semiconductor shortage and recent regulations targeting power consumption in the country. And Tesla's third-quarter auto sales released earlier this month hinted at continued strength for the auto-maker, with the company on track to near 1 million in annual auto sales.
Wedbush analyst Dan Ives said the China sales data means recent dark clouds hovering over Tesla in recent months are beginning to move into the rear view mirror.
"Selling 50k+ in the month for the key China region speaks to huge trajectory that highlights our bull China thesis for Tesla going into the next few years," Ives said in a Tuesday note, adding that "Tesla continues to dominate market share."
Tesla's Tuesday surge brought the stock to its highest level in eight months. A consecutive daily close above the $800 resistance level would signal that a risk-on appetite is building in shares of Tesla, with a re-test of its prior high likely.
Tesla topped out at $900.40 in late January, which represents potential upside of 12% from current levels. Since hitting its record high in January, Tesla fell as much as 40% before consolidating sideways as investors grappled with the chip shortage and production concerns. Shares of Tesla are up about 12% year-to-date.
