Tesla Stock Rides High Following Christmas Trading Day Surge

Tesla Inc., the leading electric-vehicle manufacturer, experienced a surge in stock prices on the first trading day after Christmas. This day is historically known for its volatility in the stock market.

During midday trading, Tesla's shares rose by 1.4%, outperforming the S&P 500's 0.3% increase and the Nasdaq Composite's 0.4% uptick.

The primary driving force behind this boost appears to be China. Data gathered by Wall Street analysts, based on weekly insurance registration records, indicates that Tesla is enjoying a record-breaking quarter in the world's largest market for battery-electric vehicles. These registration numbers serve as a reliable proxy for gauging sales volume.

On January 2nd, Tesla is scheduled to release its fourth-quarter delivery data. Analysts are anticipating a new record of approximately 475,000 units sold, surpassing the third quarter's figure of about 435,000. It's important to note that Tesla does not disclose quarterly sales numbers by region.

Nonetheless, data provided by industry associations sheds some light on what is happening. Chinese registration records reveal that Tesla delivered around 18,000 Model 3 and Model Y vehicles in the past week alone. As a result, the quarter-to-date total has reached an impressive 155,000 units, with one more week to go before final figures are calculated. These numbers were reported by Citi analyst Jeff Chung.

Tesla's Strong Chinese Sales Point to a Record Quarter

Tesla's sales in China are booming, with record-breaking numbers expected for the upcoming report on January 2. Despite the exclusion of the higher-priced Model S and X, which usually account for only 3% to 5% of total sales, Tesla's performance is still impressive. In fact, the company's best quarter ever in China saw the delivery of approximately 156,000 units during Q2 2023. However, this record is expected to be surpassed soon, as Tesla is achieving exceptional sales figures with just two out of its four models available in the Chinese market.

Notably, the refreshed Model 3 has been selling exceptionally well. In the fourth quarter alone, Tesla has managed to sell around 30,000 units of the updated Model 3 in China. This figure represents a significant increase compared to the approximately 23,000 units sold in Q3 2023.

The recent rise in Tesla stock after Christmas is consistent with historical trends. Since Tesla's initial public offering in 2010, shares have experienced gains in 10 out of 14 post-Christmas sessions. However, it should be noted that the day after Christmas often brings volatility, with an average price movement of around 4%. While gains tend to outnumber losses, down days can be quite substantial. For instance, Tesla's stock fell by a notable 11% on the day after Christmas in 2022 due to concerns over rising interest rates and CEO Elon Musk's ownership of Twitter (now known as X).

Although Tesla's stock performance in 2022 saw a decline of approximately 65%, its fortunes have turned around in 2023. As of midday on Tuesday, the shares were up by an impressive 108% for the year.

In summary, Tesla's strong sales in China are expected to contribute to a record-breaking quarter. With outstanding performance in the Chinese market and solid numbers from the refreshed Model 3, investors can anticipate positive results in the upcoming report. Furthermore, Tesla's stock has shown resilience during the post-Christmas period, with a majority of sessions seeing gains. Despite experiencing a significant decline in 2022, the company has bounced back in 2023 and is currently enjoying substantial growth.

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