Tesla stock popped after it was reported that the company took market share in China from domestic automakers. It marks a significant reversal after Tesla lost a quarter-trillion in market capitalization and CEO Elon Musk lost $27 billion due to the stock’s plunge.
Wedbush analyst Daniel Ives reported that the February data out of China indicates that BYD, Nio, Xpeng and Li Auto all saw sales declines. However, Tesla saw its market share in China increase last month. The automaker delivered 18,300 vehicles there in February, an 18% increase from the month before. In the U.S., Tesla lost market share to Ford.
Ives added that Tesla is "on a strong trajectory into March." He describes the February results as "quite impressive" for the automaker and ahead of Wall Street consensus. Ives estimates that Tesla is on track to deliver more than 200,000 vehicles in China this year.
He noted that the nation serves as a linchpin for the automaker to deliver 750,000 to 800,000 vehicles for the full year. Tesla produced 23,600 Model 3 and Model Y vehicles in about 21 days in China last month, and some of those cars were shipped to Europe.
Ives believes the price cuts and introduction of the Model Y in China were the main factors in the changing market dynamics. He added that overall EV demand in the area "looks robust" as EV penetration is on track to rise from 4.5% in China last year to 10% by next year.
Tesla stock rebounds
Tesla stock rallied by nearly 7% out of the gate this morning, reversing a weeks-long slump that has taken a bite out of the automaker's market cap and Musk's net worth. It was the third bear market in a year for the stock, although it remains far above where it was trading a year ago.
Monday was the fifth consecutive decline for Tesla stock, and after that fall, the automaker's market cap was down by more than a quarter of a trillion dollars in a little over a month. Tesla stock tumbled 21% over the five trading days through Monday and plunged 34% over the last month. Since the January peak, when the company's market cap was about $850 billion, Tesla has lost about $277 billion in valuation, according to MarketWatch.
Musk also took a steep hit from Tesla's declining stock price. According to Bloomberg, Musk lost $27 billion last week as the tech selloff weighed on Tesla shares, sending it down almost 17% in only four days. He remains the second-wealthiest person in the Bloomberg Billionaires Index with a net worth of more than $157 billion, including $102 billion in Tesla stock.
Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.