Donald Trump’s victory in the 2024 presidential election has helped Tesla Inc. (NASDAQ: TSLA) stock rocket thanks to the political alliance between the Republican President-Elect and Elon Musk.
However, the enthusiasm may have obfuscated the impact of what appears to be trouble brewing on the horizon. Specifically, Tesla vehicle sales in China in October were lower than in any month since before July 2024.
Specifically, in October, Elon Musk’s electric vehicle (EV) maker shipped 40,485 Model Ys and Model 3s. In July, the number stood at 46,227, and the drop from August – 63,456 – and September – 72,200 – is even starker, per the data shared by the data-driven Tesla delivery estimates account Troy Teslike on X.
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Should Tesla stock investors be worried about China deliveries?
While historical data reveals the drop may not be particularly concerning – records retrieved from CnEVPost demonstrate that Octobers in 2021, 2022, and 2023 have all represented the late-year bottoms – juxtaposing Tesla’s results with those of its biggest competitors does give cause for worry.
On one hand, the lower sales in October can be attributed to a major national holiday – China’s National Day on October 1, marking the founding of the People’s Republic of China in 1949. However, this explanation falls short, given that domestic competitors typically don’t experience a downturn of similar magnitude during this month.
BYD – a company that has overtaken Musk’s EV maker with its global results late in 2023 – delivered 502,657 vehicles in October and, for the first time ever, revealed it had exported 28,012 units.
While the Chinese market is not the most important one for Tesla – and is the place Musk’s firm faces the stiffest competition as it does not benefit from higher tariffs on vehicles from the People’s Republic – the number might serve as an early warning for investors that the company has not moved beyond its earlier woes.
Tesla stock price chart
Whatever the eventual impact of the China deliveries – and the overall report for October deliveries – Tesla shares are, at press time on November 8, 2024, flying high in the wake of Trump’s reelection.
In the last five trading sessions, TSLA stock soared 21.40% to its press time price of $297.57. The rally has also enabled Tesla shares to turn 19.79% into the green in the year-to-date (YTD) chart after spending a significant portion of 2024 as one of the worst-performing major U.S. companies.
Wall Street experts have also generally reevaluated their assessment of TSLA stock, generally providing an increasingly positive outlook. Wedbush’s Dan Ives, for example, predicted a Tesla valuation surge to $1 trillion, while Bank of America (NYSE: BAC) offered the Street high price target this week of $350.
Finally, it is worth noting that most of the latest revisions focused on the prospects of the second Trump presidency and preceded the China figures.
Featured image via Shutterstock
