Why Tesla and Polestar Stocks Soared, but Nikola Plunged in September

Source The Motley Fool

The first half of the year was mostly negative for electric vehicle (EV) investors. Increasing competition, continued consumer hesitancy over lack of charging infrastructure, and struggling economic conditions in many countries slowed sales growth for names including EV leader Tesla (NASDAQ: TSLA).

But sentiment started to change in the third quarter, and some EV stocks ticked higher. Tesla stock, for example, surged 22.2% last month, according to data provided by S&P Global Market Intelligence. Even EV newcomer Polestar Automotive (NASDAQ: PSNY) shares soared 41%. One exception was electric heavy-truck maker Nikola (NASDAQ: NKLA). Its shares dropped nearly 31%, but the stock reversed course at the end of the month, recovering about half of September's losses in the past week.

The push higher in Tesla shares erased most of 2024 losses. Investors grew optimistic about Tesla's Q3 delivery report as well as the upcoming Robotaxi update event expected on Oct. 10.

EV investors look for the winners

Tesla's vehicle sales did return to growth in Q3. After deliveries in the first half of 2024 dropped 6.5% compared to 2023, the company's nearly 463,000 deliveries in Q3 were up by 6.4% versus last year. But that didn't quite satisfy investors, and Tesla stock has dipped to start October. That's because it still doesn't seem likely that Tesla will reach its goal of 2 million EV deliveries this year. It would need more than 700,000 units in Q4 for that to happen.

But investors had another reason to send Tesla stock higher last month, too. Anticipation for what CEO Elon Musk will say in its upcoming Robotaxi event is high. Investors will be listening closely on Oct. 10 when the company offers its vision of when it may see meaningful monetization of its high-profit, self-driving software. Earlier this week, widely followed Tesla analyst Dan Ives from Wedbush wrote, "We believe Robotaxi Day will be [a] seminal and historical day for Musk and Tesla and marks a new chapter of growth around autonomous, FSD [full self-driving], and [an] AI [artificial intelligence] future at Tesla."

Investors also rewarded Polestar for its delivery update in September. At the end of August, the Volvo subsidiary reported a sequential 82% increase in EV deliveries in its Q2 compared to Q1. Investors poured into the stock after that report. Polestar also had a relatively high 7.6% of its shares sold short as of mid-September, which likely contributed to a short squeeze in those shares.

Nikola is in a different segment of the EV business. Its hydrogen fuel cell-powered heavy trucks aim to create an entirely new market space. The stock has dropped 80% year to date as the company has been forced to raise capital as it works to build out the fueling infrastructure for those trucks.

But sales are growing, and investors reacted positively when Nikola said it wholesaled 88 trucks to its dealers for sales to end users in Q3. Nikola has now wholesaled 200 hydrogen fuel cell trucks to dealers through the first three quarters of the year.

Nikola still has to grow the infrastructure, and its trucks compete with Tesla's battery-electric Semi trucks. That makes it the riskiest of these three names and helps explain why shares have dropped so much so far this year.

Should you invest $1,000 in Tesla right now?

Before you buy stock in Tesla, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tesla wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $728,325!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Howard Smith has positions in Nikola and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
What's Really Inside the AI Bubble? Decoding the Core Controversies Over Scale, Reliance and Valuation As ChatGPT nears its three-year anniversary, the AI boom has fueled a three-year U.S. equity rally. However, growing AI bubble concerns and investor fatigue now threaten to derail market
Author  TradingKey
Nov 14, Fri
As ChatGPT nears its three-year anniversary, the AI boom has fueled a three-year U.S. equity rally. However, growing AI bubble concerns and investor fatigue now threaten to derail market
placeholder
Top 3 Price Prediction: Bitcoin, Ethereum, Ripple – BTC, ETH, and XRP flash deeper downside risks as market selloff intensifiesBitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trade in red on Friday after correcting more than 5%, 10% and 2%, respectively, so far this week.
Author  FXStreet
Nov 14, Fri
Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trade in red on Friday after correcting more than 5%, 10% and 2%, respectively, so far this week.
placeholder
Gold Posts Biggest Weekly Gain in a Month as US Data Delays Fuel UncertaintyGold climbed higher on Friday, marking its strongest weekly performance in a month, as traders weighed the impact of a data backlog following the end of the US government's extended shutdown. Silver also moved upward.
Author  Mitrade
Nov 14, Fri
Gold climbed higher on Friday, marking its strongest weekly performance in a month, as traders weighed the impact of a data backlog following the end of the US government's extended shutdown. Silver also moved upward.
placeholder
WTI rises to near $60.00 on supply risks due to US sanctionsWest Texas Intermediate (WTI) Oil price gains for the second successive session, trading around $59.90, up by more than 2%, during the Asian hours on Friday. Crude Oil prices receive support from supply risks linked to upcoming United States (US) sanctions.
Author  FXStreet
Nov 14, Fri
West Texas Intermediate (WTI) Oil price gains for the second successive session, trading around $59.90, up by more than 2%, during the Asian hours on Friday. Crude Oil prices receive support from supply risks linked to upcoming United States (US) sanctions.
placeholder
Ethereum slides 5% as bears lean on $3,500 cap and put $3,150 support in focusEthereum (ETH) drops more than 5% after a failed push above $3,550, with price sliding to $3,153 and now holding below $3,350, the 100-hour SMA and a bearish trend line at $3,500; unless bulls reclaim the $3,350–$3,500 zone, the short-term bias stays bearish and a clean break under $3,150 could expose $3,050, $3,000 and even the $2,880–$2,850 support area.
Author  Mitrade
Nov 14, Fri
Ethereum (ETH) drops more than 5% after a failed push above $3,550, with price sliding to $3,153 and now holding below $3,350, the 100-hour SMA and a bearish trend line at $3,500; unless bulls reclaim the $3,350–$3,500 zone, the short-term bias stays bearish and a clean break under $3,150 could expose $3,050, $3,000 and even the $2,880–$2,850 support area.
goTop
quote