Tesla shares surge 2.7% on European registration rebound
EV maker shows signs of demand stabilization as investors await Q1 delivery figures due early April
Tesla shares rose 2.7% to $393 on Wednesday, extending a recovery from the company's 52-week low as investors embraced data showing a rebound in European vehicle registrations. The rally comes ahead of first-quarter delivery figures expected in early April, which analysts say will be critical in confirming whether demand for electric vehicles has stabilized after a prolonged period of decline.
The electric vehicle maker reported a 29.1% year-over-year increase in European registrations for February, marking the first monthly gain after 13 consecutive months of declines. The data, which covers the European Union, the United Kingdom, and European Free Trade Association countries, showed combined registrations for January and February reached 20,941 units, representing a 16.7% increase over the same period last year.
"This is a meaningful inflection point," said analysts watching the European market. "After more than a year of declining registration numbers, the February rebound suggests demand pressures may be easing."
Tesla, which has a market capitalization of $1.43 trillion, has climbed 83% from its 52-week low of $214.25 reached earlier this year, though shares remain 21% below their peak of $498.83. The stock is now trading below key technical levels, sitting 0.9% under its 20-day simple moving average and 8.4% below its 100-day moving average. Technical analysts have identified resistance at $416.50 and support at $387.50.
The upcoming first-quarter delivery report, expected during the first week of April, will provide a broader gauge of global demand. Last year, Tesla delivered 386,810 vehicles in the first quarter. Analysts are closely watching whether the company can maintain or improve upon that figure given ongoing competitive pressures and macroeconomic uncertainty across major markets.
Wall Street maintains a cautiously optimistic outlook on Tesla, with an average price target of $421.27, suggesting roughly 7% upside from current levels. The consensus rating includes 20 analysts recommending buy or strong buy, 17 suggesting hold, and 8 advising sell or strong sell, according to market data. The company's forward price-to-earnings ratio stands at 175.44, reflecting investor expectations for future growth despite recent operational challenges.
Despite the positive European registration data, Tesla faces intensifying competition in the region. Chinese rival BYD sold 15,438 vehicles in Europe during February, surging 185.3% year-over-year, highlighting the competitive landscape Tesla navigates as it seeks to regain momentum in key international markets.
Sentiment around the Tesla brand has softened recently. An EV Intelligence Report indicates the company ranks last in brand trust and perception compared to traditional automakers including Toyota Motor Corp and Honda Motor Co Ltd. The survey found negative sentiment related to Chief Executive Officer Elon Musk accounted for 14% of responses regarding Tesla's Full Self-Driving technology, underscoring the challenges the company faces in maintaining consumer confidence.
The February European registration improvement provides a counterpoint to recent concerns about demand erosion. However, analysts warn that a single month of data does not constitute a trend, and the first-quarter delivery figures will offer a more comprehensive view of whether the recovery can be sustained across geographies.
Tesla's ability to execute on its delivery targets while navigating competitive pressures and potential macroeconomic headwinds will be the key factors driving stock performance in the coming months. Investors will also be watching for any commentary on production capacity, pricing strategy, and the company's autonomous driving roadmap when the quarterly results are released.