China-Made Tesla Sales Rose in June. Is This the Lifeline TSLA Stock Needed?

Tesla (TSLA) shares are pushing to the upside on Wednesday after data from the China Passenger Car Association confirmed the automaker’s sales of China-made electric vehicles increase 0.8% on a year-over-year basis in June. 

Though modest, the increase is significant given it snapped TSLA’s eight-month losing streak in one of its biggest global markets. Despite today’s gain, Tesla stock is down 13% versus its high set in the final week of May. 

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Q2 Deliveries Weakness Could Hurt Tesla Stock

While China data sure is positive for investors, it’s not very likely to help Tesla shares extend gains further since the automaker’s overall deliveries for the second quarter came in down 14% year-over-year on Wednesday. 

The company delivered just 384,122 vehicles in its fiscal Q2, down significantly from 443,956 deliveries in the same quarter last year – reinforcing concerns that TSLA is losing market share to its Chinese rivals. 

Tesla Inc has recently had a successful launch of robotaxi services in Austin, but it’s still reasonable to assume that continued weakness in the core EV business will make it incrementally difficult for TSLA stock to print new highs in the near term. 

TSLA Shares Need Three Things to Recover

According to Steve Westly, a former member of Tesla’s board, the EV maker needs three things to unlock its path to sustainable share price recovery. 

1. Tesla must launch a lower-cost ($25,000) model to compete more aggressively with rivals.
2. Tesla needs regulatory approval for its robotaxi in multiple cities to catch up with Waymo.
3. Tesla has to rebrand itself – which means less politics, more products, and lower prices. 

Westly remains confident that TSLA has the technology to compete across all verticals, but unless it “finds a higher gear” – this EV stock may continue to fail in delivering the kind of gains that investors have come to expect of it, he told CNBC in an interview today. 

Wall Street Rates Tesla In at “Hold” Only

Investors should note that Wall Street firms are no longer bullish on Tesla stock either. 

According to Barchart, the consensus rating on TSLA shares currently sits at “Hold” only with the mean target of about $297 indicating potential downside of some 5% from here. 

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.