What happened
Tesla (TSLA 0.66%) shares jumped to start this week's trading after a weak start to the year. As of 10:15 a.m. ET, the stock was higher by 7% so far today, but that still hasn't gotten it into the green for 2023.
Much of Tesla's trading last week was focused on its performance in the important Chinese market. Deliveries from the company's Shanghai facility dropped in December, and Tesla also announced price cuts for Chinese customers. But investors seem to be looking at the bigger picture today.
So what
Though the price cuts and lower sales in China reflect growing competition and what will likely result in a drop in market share for Tesla, the stock is getting a boost as investors see how much the overall electric vehicle (EV) market is still growing. New data shows that U.S. EV sales surpassed 807,000 in 2022, reports The Wall Street Journal.
Image source: Tesla.
That represented a jump of more than 65% over 2021, despite the overall automotive market contracting last year. New vehicle sales dropped 8% overall year over year. The growth in EV sales meant fully electric vehicle penetration almost doubled to be 5.8% of the total U.S. new vehicle market in 2022.
Now what
The Journal report of the newly released data is helping remind investors just how much more runway exists for Tesla and other EV makers. Tesla investors have been fretting about a drop in demand for its products as meaningful competition ramps up. While a drop in market share is inevitable, the size and growth of the global EV market leaves plenty of room for Tesla to continue growing as well.
That has investors thinking the 74% drop in Tesla's value in the 2022 bear market might now be bringing an opportunity to own shares.
