Tesla stock swung Wednesday as news about tariffs and sales whipsawed shares, but finished strong.
Positive news from President Donald Trump, developments on the trade front, and U.S. sales data were on the positive side of the ledger. Additional weak sales data from Europe was the negative.
Shares of the electric-vehicle maker traded above $278 a share early Wednesday, but fell to almost $267 around lunchtime. The stock rallied, closing at 279.10, up 2.6% and near the highs of the day, while the S&P 500 and Dow Jones Industrial Average rose about 1.1%.
Many stocks got an initial lift from news Tuesday evening. Commerce Secretary Howard Lutnick said a deal with Canada and Mexico to lower tariffs could come as early as Wednesday. Shares rose further after the White House confirmed a roughly monthlong reprieve on the levies.
Tariffs of 25% on both countries initially went into effect on Tuesday. That is particularly nettlesome for U.S. auto makers that source a significant percentage of the parts in most cars assembled in the U.S. from Canada and Mexico. Ford Motor and General Motors shares fell 2.9% and 4.6% on Tuesday, while Tesla stock dropped 4.4%.
Ford and GM shares, however, bounced back Wednesday, adding 5.8% and 7.2%, respectively.
Tesla stock might not be up as much as peers because the company’s sales in Germany plunged 76% year over year in February. That isn’t what investors want to see. Tesla’s European-wide sales dropped about 45% year over year in January.
Weak January sales in the U.S. and Europe stoked investors’ fears that CEO Elon Musk’s political activities were turning off some core Tesla buyers—politically left-leaning people looking to go green.
U.S. sales, however, bounced back. Tesla sold about 42,000 cars in February, up about 14% from the 37,000 sold in February 2024, according to preliminary data from Wards Automotive.
Along with a potential tariff deal, President Donald Trump thanked Musk by name in his Tuesday address to Congress while touting the cost-cutting accomplishments of Musk’s Department of Government Efficiency.
“Thank you, Elon. He’s working very hard. He didn’t need this. He didn’t need this. Thank you very much. We appreciate it,” said the president. “Everybody here even [the Democrat’s side] appreciates it, I believe. They just don’t want to admit that.”
Investors will continue to watch developments at DOGE and try to correlate them to sales activity at Tesla.
In the end, investors want to see growth. Tesla sold about 1.8 million cars in 2024, roughly flat with 2023. Wall Street expects Tesla to sell two million cars in 2025.
Coming into Wednesday trading, Tesla stock was up about 8% since the Nov. 5 election, and down about 36% from the Jan. 20 inauguration.
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