Tesla stock rose early Tuesday, adding to recent gains even as the auto industry prepares for its latest shake-up.
Tesla stock was up 1.2% to $435.83 in premarket trading. Shares rose 2.3% on Monday.
Two large Japanese car makers, Honda and Nissan, announced plans to merge on Monday. The deal would create the world's third largest car maker by annual sales.
The move comes amid increasing competition in the car industry from China's increasing car exports and electric-vehicle specialists such as Tesla.
The merger is expected to help Honda and Nissan compete due to increased scale. It might also put pressure on other midsize car companies to do something similar.
It didn't seem to worry Tesla investors though. While both Honda and Nissan sell electric vehicles, they're likely serving a different set of customers. Tesla's vehicles are significantly more expensive than Honda and Nissan brands, and have more advanced self-driving capabilities, which investors might see as giving Tesla an edge.
Investors could also be mindful that Tesla's share price isn't all that connected to its fundamentals. As Barron's reported Monday, some analysts say that Tesla's success on the stock market is more about "narrative momentum" and less about its sales and profit.
Regardless, it has been a very good year for Tesla with shares up 73% since the start of 2024.
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