Tesla stock climbs 3% to breach $400 again: what's behind the surge?

Shares of Tesla TSLA climbed on Thursday, rising above the $400 mark as improved sales data from China supported investor sentiment despite ongoing concerns around the company’s long-term strategy.

The stock was up around 3% at $409.70 in early trading.

China sales provide boost

Tesla sold 79,478 vehicles from its Shanghai plant in April, including exports, representing a 36% increase year-on-year, according to Chinese industry data providers.

The latest figures follow a strong first quarter, during which Tesla shipped approximately 213,000 vehicles from Shanghai, up 24% from the same period a year earlier.

However, domestic sales in China showed signs of weakness, totaling about 113,000 vehicles in the first quarter, down 16% year-on-year.

The mixed data suggests Tesla is stabilising in one of its most important markets outside the United States, even as competitive and regulatory challenges persist.

The company continues to face mounting competition, particularly from Chinese electric vehicle manufacturers.

At the same time, its limited product lineup and reliance on future AI-driven growth have heightened scrutiny from investors.

Europe recovery remains uneven

Tesla’s performance in Europe has also shown signs of recovery, though trends remain inconsistent across regions.

Registrations more than doubled in several markets in April, rising 111% in Sweden and 102% in Denmark, according to data from Mobility Sweden and bilstatistik.dk.

France recorded a 112% increase, while the Netherlands saw a 23% gain.

However, declines were recorded elsewhere, with registrations falling 61% in Norway, 47% in Spain, 33% in Portugal, and 5% in Italy.

Overall, Tesla’s European sales have rebounded this year following two consecutive annual declines, supported by an easier comparison base and increased demand for electric vehicles.

The rise in demand for electric vehicles has been partly driven by higher fuel costs following the US-Iran conflict, which has pushed oil prices higher and increased interest in alternatives to internal combustion engines.

This shift has provided a tailwind for Tesla in certain markets, particularly where price sensitivity to fuel costs is higher.

Stock still under pressure

Despite Thursday’s gains, Tesla shares remain down about 6% year-to-date.

The stock’s recent weakness reflects broader concerns about the pace of execution across Tesla’s core and emerging businesses.

Investor attention has increasingly shifted toward Tesla’s artificial intelligence initiatives, which underpin much of its long-term valuation.

The company’s “physical AI” strategy includes autonomous driving, robotaxis, and humanoid robotics.

Tesla launched its robotaxi service in Austin, Texas, in June, but expansion to additional cities has been slower than expected.

This has raised questions about the scalability of the business and the timeline for generating meaningful revenue.

Short-term improvements in vehicle sales, particularly in China and parts of Europe, are providing support, but long-term sentiment remains tied to progress in AI and new technologies.