What happened
Actions of Tesla (NASDAQ: TSLA) increased on Tuesday, increasing 6.8% from 11:40 am EST.
Growth stock shares are likely to be trading higher due to a bullish day in the general market and an analyst note to investors saying Tesla’s competitor and Chinese electric vehicle maker NIOin (NYSE: NIO) the revelation of its electric sedan did not impress.
The gain on Tesla’s shares on Tuesday extends to the recent rally, which cooled on Monday when the shares took a breather. The stock is now at 22% in 2021 and around 800% in the last 12 months.
Image source: Getty Images.
And
NIO’s new ET7, the company’s first sedan model, is “good, but not enough to make critical changes to the Tesla challenge,” he said. Citi analyst Jeff Chung in a note to investors on Tuesday. The new ET7 is due to start shipping in 2022.
In addition, a possible revision of Tesla’s Model S design could be an obstacle for NIO, the analyst said. And Tesla’s Model Y SUV is well positioned to compete with NIO’s EC6 model.
While news of Tesla’s strong competitive position may be a factor helping stocks today, another reason that stocks are on the rise is probably optimism in the broader market. At the time this book was written, the Nasdaq Compound increased by 0.3%.
What now
Some investors may be concerned that the NIO could destroy Tesla’s growth opportunity in China. But Chung’s comments suggest that Tesla is fierce competition for Chinese electric vehicle companies themselves.