Tesla (TSLA) Stock: Climbs as China Demand Remains Strong Despite Competition

TLDR

Table of Contents

Tesla stock gained 1.5% to $345.05, approaching critical $350 resistance after three consecutive positive sessions
Model Y SUV sales declined 24% year-to-date while Model 3 sedan surged 38%, highlighting competitive pressure in SUV market
Operating margins compressed from 14.6% to 4.1% as competitors enter market with loss-making vehicles
Musk promotes FSD Version 14 safety improvements with Version 15 promising major capability advances
Company cuts UK lease rates up to 40% while China shows strong Model Y demand with 4-6 week wait times

Tesla shares rose 1.5% to $345.05 Monday as investors embraced the electric vehicle maker’s autonomous driving developments. The stock has climbed for three straight sessions and now tests a key technical level.

The rally positions Tesla within striking distance of $350 resistance that has capped gains for two weeks. A sustained break above this ceiling could unlock moves toward $368 and potentially $390.

Tesla’s vehicle sales tell a mixed story this year. The Model Y SUV, the company’s top seller, posted a 24% decline in sales through mid-July compared to 2024. The Model 3 sedan delivered the opposite result with a 38% sales jump over the same timeframe.

Tesla's big Model Y refresh is here
– Redesign with headlight and tail light bar
– New suspension + wheels
– Power folding second row seats
-Larger 15.4-inch center display
– 8-inch rear display
– 250kw supercharging
How we feeling about the new look? 👀… pic.twitter.com/RCrjxiEh2s
— Marques Brownlee (@MKBHD) January 10, 2025

This split performance suggests competitive pressure rather than brand-wide issues. New rivals including Chevrolet’s Blazer and Equinox, Nissan’s Ariya, and Hyundai’s Ionic 5 have captured market share in the lucrative SUV segment.

These competitors are building vehicles at a loss to establish market presence. General Motors achieved “variable profit positive” status on EVs, covering labor and materials but not development costs or capital investments.

Margin Pressure Reflects Industry Reality

Tesla’s profitability has felt the competitive squeeze. Operating margins collapsed from 14.6% in Q2 2022 to just 4.1% in Q2 2025. Automotive revenue dropped 7% in Q2 2024 and fell another 16% in Q2 2025.

The company plans to counter with a lower-cost Model Y variant that CEO Elon Musk describes as “just a Model Y.” High interest rates have made vehicle financing more expensive, benefiting Tesla’s cheapest Model 3 over the pricier Model Y.

Tesla has responded with aggressive international pricing. The company cut UK and European lease rates up to 40%, with Model 3 leases starting at £252 monthly and Model Y at £377-400.

Autonomous Driving Timeline Energizes Investors

Musk’s Full Self-Driving roadmap remains a key catalyst for bulls. The CEO recently claimed FSD Version 14 achieves safety levels superior to human drivers. Version 15 promises what Musk calls “an order of magnitude” improvement in capabilities.

A robotaxi pilot program in Austin, Texas provides real-world testing for broader deployment. The robotaxi model could transform Tesla’s economics by maximizing vehicle utilization to offset high upfront EV costs with low operating expenses.

Tesla maintains strength in China despite economic headwinds and local competition from BYD and XPeng. Model Y wait times have extended to 4-6 weeks, showing healthy demand even with reduced incentives.

The stock sits above its 50-day moving average near $320 and 100-day average around $310. The Relative Strength Index stands below 65, indicating positive momentum without overbought conditions.

Recent trading volume exceeded 30-day averages on up days, suggesting institutional interest returns as macro risks fade. Tesla reduced UK lease rates up to 40% while China Model Y wait times stretch to 4-6 weeks.

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