Tesla (NASDAQ: TSLA) shares plummeted over 5% in intraday trading Tuesday, erasing gains made Monday when it surged over 15% on China FSD progress.
Tesla stock surged more than 15% on Monday, marking its largest single-day gain since March 2021, following a significant advancement in the rollout of its full self-driving (FSD) technology in China.
Elon Musk, CEO of Tesla, made an unexpected visit to China, over the weekend. The EV giant announced on Sunday that Chinese regulatory authorities had lifted restrictions on Tesla vehicles after the company successfully met data security requirements in the region. Moreover, Tesla will collaborate with Baidu (NASDAQ: BIDU) to leverage its mapping and navigation capabilities within China.
Elon Musk expressed his gratitude and excitement following a meeting with Premier Li Qiang, stating,
“Honored to meet with Premier Li Qiang. We have known each other now for many years, since early Shanghai days.”
Analyst Insights
Dan Ives, an analyst at Wedbush, described the announcement as a “watershed moment” for Tesla.
Ives said,
“Musk winning FSD approval in the key China market is a watershed moment for the Tesla story in our view. This news will be a major focus from investors this morning as it shows how close the FSD vision in China is to becoming a reality for Tesla.”
Earnings Report and Market Response
This milestone achievement comes less than a week after Tesla shares surged higher following its first-quarter results.
The earnings report missed analysts’ expectations but the market responded positively to Tesla’s accelerated timeline for new model launches and discussions surrounding the development of a next-gen vehicle. Musk reiterated his unwavering vision for Tesla, centered around artificial intelligence (AI), full self-driving capabilities, and the prospect of robotaxis.
During the earnings call, Musk reaffirmed his confidence in Tesla’s ability to solve autonomy challenges, stating,
“If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company.”
He added,
“We will, and we are.”
Tesla (NASDAQ: TSLA) Stock Price Action
TSLA stock fell 5.55% to close at $183.28 on Tuesday. Its value has risen by 26.68% this week. Trading activity has witnessed 125,532,168 (125.53 million) shares changing hands, well above the average daily volume of 102.98 million.
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