Key Takeaways:
Tesla shares closed higher for a sixth consecutive session, even as weaker-than-expected earnings from Chinese EV rivals and a 15% drop in the company's China sales weighed on the stock.
Tesla shares rose 0.4% to $442.10, extending a six-day winning streak, as investors awaited concrete artificial intelligence updates from the automaker.
China's new car sales dipped about 7% in the first quarter, according to data tracked by Citi analyst Jeff Chung, highlighting the demand headwinds facing the world's largest auto market. Tesla sold about 139,000 cars in China through April, down 15% year over year.
Li Auto shares fell 1.52%, XPeng dropped 0.06% and NIO declined 3.48% after all three reported weaker-than-expected first-quarter earnings Thursday morning. XPeng posted a net loss of 1.78 billion yuan ($262.6 million), more than double the 811.9 million yuan analysts had projected, though its gross margin expanded to 20.6% from 15.6% a year earlier. Despite the misses, the trio guided for combined second-quarter sales of about 313,000 vehicles, up 9% year over year — an improvement from the 5% growth in the first quarter.
The absence of new FSD regulatory approvals outside the U.S. has capped upside for Tesla shares, which remain down 1.7% this year. Investors are looking for FSD approval in new regions, expansion of Tesla's robo-taxi service to more cities, and the unveiling of the newest version of its Optimus humanoid robot, expected this summer.
Tesla reported about 1.3 million FSD subscriptions at the end of the first quarter. U.S. customers can pay $99 a month for the driver-assistance system, which is capable of handling most driving tasks but still requires constant supervision.
The S&P 500 rose 0.58% on Thursday, while the Dow Jones Industrial Average finished flat. Tesla's session low of $436.30 came before the stock recovered to close in positive territory.
The six-day winning streak follows a pattern of short-lived rallies tied to speculation about Chinese regulatory approval for Tesla's Full Self-Driving technology — approval that has yet to arrive. Each streak has been followed by a pullback, leaving the stock little changed on a year-to-date basis.
For Tesla, the next potential catalysts are binary. FSD approval in China or Europe would open new revenue streams from the company's AI software business, while a delay into the second half of the year could keep the stock range-bound. The Optimus robot unveiling, expected this summer, represents a longer-term narrative driver rather than a near-term earnings event.
This article is for informational purposes only and does not constitute investment advice.
