Shares of Tesla (NASDAQ:TSLA) rose on Tuesday, bolstered by a competitor's struggles and excitement surrounding its upcoming "Battery Day" presentation. As of 11:20 a.m. EDT, Tesla stock was up more than 6%.
Reports that the Securities and Exchange Commission (SEC) is investigating rival electric-vehicle maker Nikola (NASDAQ:NKLA) for allegations of fraud are likely helping to prop up Tesla's shares. In a scathing report on Thursday, short-seller Hindenburg Research accused Nikola of lying to investors about the true state of its battery technology and vastly overstating its progress toward the development of its electric truck.
After Nikola responded to some of Hindenburg's claims on Monday, Hindenburg then argued its response was a "tacit admission of securities fraud." Should the SEC agree with Hindenburg's view, or if its investigation uncovers other instances of wrongdoing, Nikola's ability to compete effectively in the electric vehicle market could be severely weakened.
As its competitor wrestles with fraud allegations, Tesla is gearing up for its "Battery Day" on Sept. 22. Investors are looking forward to seeing what new technologies CEO Elon Musk unveils during his presentation. Excitement has been rising for Tesla's battery-related growth opportunity, as fears surrounding climate change are bolstering demand for electric vehicles and clean energy storage solutions around the world.
Judging by the recent gains, many investors are choosing to buy Tesla's stock ahead of the event in anticipation of Musk's forthcoming announcements.