Tesla stock gains for tenth consecutive session

Tesla (TSLA) closed higher for the tenth consecutive trading session on Thursday, marking the stock’s longest gaining streak in over two years.

In stock trading, Tesla shares increased 4.58 percent to $234.86, the highest closing price since October 2022. In the previous session, the stock’s share price reached $230.83. Tesla was the S&P 500 index’s third-best performer on Thursday’s trading session, with the index ending 0.62 percent higher at 4,293.93.

After the company announced a new arrangement with General Motors to extend its Supercharger network, Tesla’s shares continued to rise by more than 5% in after-hours trading. General Motors (GM) stock increased by more than 4% in after-hours trading after closing 1.02 percent lower during normal trade.

Chinese data, Model 3 update support Tesla’s rally

Over the past ten sessions, Tesla has gained more than 28.4 percent in the equity market. Analysts point out that new sales data from China and an update regarding its Model 3 helped the electric vehicle (EV) producer maintain its rally.

Full $7,500 federal tax credit applies to all new Model 3 & Y—meaning Model 3 starts at $32,740

Factor in fuel/maintenance savings & total cost of ownership vs comparable ICE vehicles drops to well below $30k.

If eligible, state & local incentives can drop price as low as $20k… pic.twitter.com/wV2HrpU1fz

— Tesla (@Tesla) June 8, 2023

The China Passenger Car Association reported on Thursday that May retail sales of sustainable cars, including fully-electric and hybrid vehicles, had soared by 60.9 percent from the same period last year to 580,000 units. The figure also represented 33.3 percent of total passenger cars sold in the country.

China was the source of $4.89 billion in sales for Tesla between January and March, or 21% of the company’s overall revenue. Chinese business for the corporation totaled $18.15 billion in 2017, or 22.2 percent of its total annual revenues in 2022.

Earlier this week, American regulators confirmed that all Tesla Model 3 units are now eligible for $7,500 EV consumer tax credits because of the company’s adjustment to its battery supply chain. The new development is expected to significantly lower the price of Model 3, with Californian consumers may see up to $15,000 in price reductions.

We're teaming up with @tesla to enhance your electric vehicle experience. More charging stations, less range anxiety, more sustainable journeys. It's about your convenience, not our competition. #EverybodyIn pic.twitter.com/D4joovLjPh

— General Motors (@GM) June 8, 2023

Analysts predict that the subsidy update, along with “aggressive discounts” implemented by Tesla, will prop up sales of the flagship model, which is experiencing a significant decline in demand due to macroeconomic uncertainty and increasing competition. The tax credit will bring Model 3’s price closer to its competitors, such as Toyota’s Camry, which has a starting price of $26,320.

Direxion managing director Ed Egilinsky told FOX Business that the market’s increasing interest in mega-cap and growth stocks also partially contributed to Tesla’s recent rally.

“While some traders might trade off the headlines to capture the short-term upward price momentum, others might look at this as an opportunity to take a bearish view, believing the stock rally has been overextended in the short term and might see a reversal in trend,”
said Egilinsky

BofA Global Research reported that $8.5 billion had flowed into major tech stocks from the end of May to the beginning of June, helping the stock market that faced pressures from the U.S. debt ceiling debate last month. Despite the rally in these growth stocks, some experts cautioned that there was a “narrowness” in the market’s rally, with heavyweight stocks contributing most to the market’s gains.