Tesla shares up 10% following sales forecast

Tesla shares went up 10 per cent on Wednesday following the company’s optimistic sales forecast for the year and plans to introduce more affordable models by early 2025, according to Reuters.

This news buoyed investors amidst concerns stemming from recent layoffs, executive departures, price reductions, and the postponement of a key meeting with the Indian prime minister.

Despite disappointing quarterly results, analysts noted CEO Elon Musk’s efforts to accelerate product launches as a positive move.

Tesla’s market value was poised to increase by nearly $50 billion, despite a 42 per cent decline in stock value this year amid heightened competition and decreasing sales.

The growth strategy may bolster support for a shareholder vote in May on Elon Musk’s $56 billion compensation package, previously invalidated by a Delaware court. While some investors had expressed opposition to the package, citing Tesla’s stock decline and governance issues, Tesla’s plan to develop more affordable models using existing platforms was interpreted as a shift away from earlier ambitious plans.

Musk focused on diversifying Tesla’s business during the earnings call, highlighting endeavors in AI, humanoid robots, and autonomous vehicles.

Despite limited details on the new models, analysts viewed Tesla’s investment in new technologies positively, positioning the company well amidst growing competition and increasing price sensitivity in the EV market.