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Why Tesla Stock Jumped Monday

By Daniel Sparks - Mar 2, 2020 at 12:29PM

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Are shares of the electric-car maker rebounding from last week's sell-off?

What happened

Shares of Tesla (TSLA 0.78%) jumped on Monday, 9% as of 12:00 p.m. EST.

Shares are likely rebounding from a sharp pullback in late February. In addition, a report that the automaker may be aiming for North American sales in Q1 similar to the strong sales it achieved in Q4 may be driving some investor optimism for the stock.

Tesla's Cybertruck

Tesla Cybertruck. Image source: Tesla.

So what

The stock's gain on Monday comes after shares were beaten down in late February. Tesla stock fell about 30% from an all-time high achieved during the month. The stock's decline was primarily driven by some analyst downgrades and an overall market sell-off due to concerns about the coronavirus. It's possible, therefore, that some investors are simply buying shares because they believe the stock's recent sell-off went too far.

Meanwhile, electric-vehicle news website Electrek is reporting that Tesla management is urging its North American sales team to deliver just as many cars in the market in Q1 as it did in Q4 -- a record quarter for the company. For this information, Electric is citing "sources familiar with Tesla's U.S. sales."

"They are reporting strong demand in the first quarter and sources attribute it, at least partly, to the Cybertruck unveiling in November of last year," wrote Electrek. Hype surrounding the truck's unveiling may have helped drive interest for Tesla's overall vehicle lineup. Of course, the Cybertruck itself isn't expected to come to market until late 2021.

Now what

For the full year of 2020, Tesla guided for deliveries to exceed 500,000 units. This compares to about 368,000 in 2019. However, the federal tax credit that qualifying Tesla buyers were eligible for in 2019 expired at the end of the year, so there have been concerns about how this might affect demand.

Investors will get to see how well deliveries have fared in Q1 when the automaker reports deliveries for the period within the first few days of April.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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