Price AnalysisStocks

Tesla Stock (TSLA) Bounced Today: Here’s Why

Tesla shares (NASDAQ: TSLA) react to the latest announcement about plans to ensure continued raw materials supply to lead the growing EV market. The report saw TSLA soaring amid early trading, gaining 3.5%.

What Happened

Tesla plans to introduce BYD, one of the leading China EV makers, as another battery supplier. Also, Warren Buffett likes this Chinese automaker. Buffett’s Berkshire Hathaway boasted a 7.7% stake in BYD, owning 225 million shares as of 31 December 2021.

The announcement quoted Lian Yubo of BYD confirming his firm and Tesla are “now good friends.” Yubo added that BYD would begin supplying batteries to the car electric company.

What Next

BYD sold a combination of 740,000 fossil-fuel and electric vehicles in 2021. Its newly introduced energy-car production, comprising battery-electric and plug-in hybrid cars, tripled Y/Y last year to over 600,000. That makes BYD a Tesla competitor, as Musk’s company boasts an industrial plant in the leading EV market globally.

While car production accounted for the higher part of sales, battery sales symbolized nearly 7.3% of 2021’s revenue. The alignment translated to a fascinating combination as other battery suppliers aren’t competing with Tesla for car sales.

Elon Musk knows about the growing EV competition, and battery supply might be among the supply chart issues in the upcoming years. Investors are celebrating the updates about Tesla’s plans to ensure a steady pool to its expanding manufacturing volume with essential parts that might see faded supply for most EV makers.

EV firms face production challenges while dealing with inflationary problems, like every sector. Nevertheless, products see surged demand regardless of the dares plaguing consumer wealth and the global economy. Recently, Tesla’s Elon Musk stated that production, not customer demand, remained a crucial challenge.

Electric cars might become ubiquitous like Apple (AAPL) iPhone with time. Though no one knows when, plus the path could be rocky, automobiles seem to have a bright future.

You can consider investing in Tesla stocks to monetize the EV craze. Experts advise enthusiasts to use the time-arbitrage approach. The strategy encompasses selling near-term put options to purchase shares worth long-term holding.

Editorial credit: Nadezda Murmakova / shutterstock.com

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