The Tesla Inc (NASDAQ: TSLA) share price is roaring back to life after more than a month of declines.
Shares in the electric vehicle (EV) company leapt 7.7% higher last night to US$257.18. The market-beating move means Tesla shares have rallied more than 19% in 12 days. For comparison, the broader tech-centric Nasdaq Composite Index (NASDAQ: .IXIC) is up a lesser 4.9% over the same timeframe.
Let's look into what's driving this newfound strength in the Tesla share price.
Weak China economy, where?
China is an attractive market for EV makers. Take a moment to consider the country's billion-plus population, growing middle class, and rapid electric vehicle adoption.
Unsurprisingly, many investors see it as a cornerstone for fueling Tesla's growth into the future. However, relying on China to generate increasing EV sales may have come into question in July.
The proverbial golden goose began showing signs of distress last month. For one, the country recorded negative consumer price inflation (known as deflation) in July — falling 0.3% year on year. Simply put, prices for goods and services were lower than last year on aggregate.
This suggests a softening economy, possibly caused by waning consumer demand. Simultaneously, China has lowered its interest rates and witnessed further financial weakness in its largest property developers — Evergrande and Country Gardens.
Tie all of this together, and it's easy to see why the Tesla share price tumbled 26% between 18 July and 18 August. However, this gloomy perspective likely changed overnight after EV rival BYD handed out its first-half results.
The China-based company's release showed revenue grew 72.7% to A$55.25 billion year on year. In addition, net profits increased by a staggering 204.7% to A$2.33 billion versus the prior corresponding period.
As such, Tesla investors may be comforted by the resilience shown by a fellow EV maker despite the tough economic conditions.
'Supercharging' the Tesla share price
Closer to home, Tesla is reportedly planning to roll out access to non-Tesla vehicles across nearly half of its Australian Supercharge stations. The move follows a successful pilot program in New South Wales.
A Tesla spokesperson commented on the announcement, stating:
This step is instrumental in encouraging more drivers to transition to electric vehicles. Under this program, select Supercharger sites have been seamlessly integrated into the Tesla app, granting non Tesla EV drivers access to Tesla's superior charging network.
While a direct financial benefit from open access is unclear, investors might see it as creating indirect value for the Tesla brand.
The Tesla share price has ascended nearly 138% in 2023.
