Why Tesla Stock jumped on Tuesday

What happened

Actions of You’re here (NASDAQ: TSLA) surged Tuesday, up 6.8% as of 11:40 a.m. EST.

Growth stock shares are likely trading higher amid a bullish day in the overall market and an investor analyst note saying Tesla’s competitor and the Chinese electric vehicle maker NIOof (NYSE: NIO) the unveiling of its electric sedan did not impress.

Tesla’s stock gain on Tuesday continued a recent uptrend, which calmed down on Monday when stocks took a break. The stock is now up 22% in 2021 and around 800% in the past 12 months.

So what

NIO’s new ET7, the company’s first sedan model, is “good but not enough to make critical changes to Tesla’s challenge,” said Citi analyst Jeff Chung in a note to investors on Tuesday. The new ET7 is expected to start shipping in 2022.

Additionally, a potential redesign of Tesla’s Model S could be a headwind for NIO, the analyst said. And Tesla’s Model Y SUV is well positioned to compete with NIO’s Model EC6.

While the news of Tesla’s strong competitive positioning may be a factor helping the stock today, another reason stocks are rising is likely optimism in the broader market. As of this writing, the Nasdaq composite is up 0.3%.

Now what

Some investors may have feared that NIO could eat away at Tesla’s growth opportunity in China. But Chung’s comments suggest that Tesla is in fierce competition for Chinese electric vehicle companies.