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Why Tesla (NASDAQ:TSLA) stock jolted higher on Tuesday

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

Shares of Tesla Inc (NASDAQ: TSLA) rose on Tuesday, bolstered by a competitor's struggles and excitement surrounding its upcoming "Battery Day" presentation. Tesla stock closed up more than 7%.

So what 

Reports that the Securities and Exchange Commission (SEC) is investigating rival electric-vehicle maker Nikola (NASDAQ: NKLA) for allegations of fraud are likely helping to prop up Tesla's shares. In a scathing report on Thursday, short-seller Hindenburg Research accused Nikola of lying to investors about the true state of its battery technology and vastly overstating its progress toward the development of its electric truck.

After Nikola responded to some of Hindenburg's claims on Monday, Hindenburg then argued its response was a "tacit admission of securities fraud." Should the SEC agree with Hindenburg's view, or if its investigation uncovers other instances of wrongdoing, Nikola's ability to compete effectively in the electric vehicle market could be severely weakened.

Now what 

As its competitor wrestles with fraud allegations, Tesla is gearing up for its "Battery Day" on Sept. 22. Investors are looking forward to seeing what new technologies CEO Elon Musk unveils during his presentation. Excitement has been rising for Tesla's battery-related growth opportunity, as fears surrounding climate change are bolstering demand for electric vehicles and clean energy storage solutions around the world. 

Judging by the recent gains, many investors are choosing to buy Tesla's stock ahead of the event in anticipation of Musk's forthcoming announcements.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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