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Tesla Stock Was Moved by Germany and Russia Last Week. China Moves It This Week.

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An aerial view of Tesla Shanghai Gigafactory.

Xiaolu Chu/Getty Images


Tesla

stock rose last week as oil spiked and the company secured permits for its new German plant. This week, news out of China should be a big factor in stock trading.

Sales and production data from Tesla’s Shanghai facility should arrive midweek. Investors should brace for a dip in reported numbers.

A dip sounds bad, but it doesn’t have to be. And Tesla (ticker: TSLA) investors are in a better mood to digest any number after last week. Shares rose 3.5% even as the

S&P 500
and

Dow Jones Industrial Average
both fell 1.3%.

Oil helped. Benchmark crude prices spiked 26% last week as fallout from the Russia-Ukraine war made waves in energy markets. Gasoline prices, which track crude oil, became national news. High gas prices, at the margin, are good for electric-vehicle sales. The higher gasoline prices go the faster an EV buyer makes up higher initial purchase prices with lower fueling costs.

Germany helped as well. The company received required permits to start operating its new plant near Berlin. Permits were always expected, but the timing was unknown. Wedbush analyst Dan Ives wrote Sunday the approvals removed an overhang in the stock.

He is a Tesla bull, rating Tesla shares a Buy. His price target is $1,400 a share.

Next up for Tesla investors are Chinese sales and production data, which should arrive midweek. Tesla doesn’t report the figures, but Wall Street watches releases from industry data providers.

Tesla delivered about 60,000 vehicles from its Shanghai plant in January. That was down from roughly 73,000 delivered in December. The January dip was the same pattern seen in delivery figures from


NIO

(NIO),


XPeng

(XPEV) and


Li Auto

(LI). Those three delivered a record 40,576 vehicles combined in December and just under 35,000 in January.

Some demand in China might have been pulled forward into the last month of 2021. Some Chinese incentives for buying EVs fell at the start of 2022.

In February, Chinese EV makers had to deal with the Chinese New Year holiday. NIO, XPeng and Li delivered just under 21,000 vehicles combined in February. Tesla’s production doesn’t have to drop 40% like it did for those three. Tesla exports cars to Europe from its Chinese plant. But the holiday can impact production schedules at Tesla just like it can for other Chinese manufacturers.

Tesla shipments of around 50,000, down from roughly 60,000 in January, with February plant production between 50,000 and 60,000 units should be good enough to support the stock.

Coming into Monday trading, Tesla stock has fallen about 21% year to date. The

Nasdaq Composite,
home to other richly valued growth stocks, has decline about 15% year to date.

Write to Al Root at allen.root@dowjones.com

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