Tesla (NASDAQ: TSLA) stock may be coming off its best week since last January, but investors aren’t taking profits today. Shares of the electric-vehicle (EV) leader soared higher Monday after news over the weekend that CEO Elon Musk made a surprise — and productive — trip to China.
Tesla shares jumped after it was reported that Musk met with China’s Premier Li Qiang, and the company received approval to move forward with its Full Self-Driving (FSD) software technology in its China-built EVs. The stock was higher by 12.3% as of 11:05 a.m. ET, bringing the gains to more than 30% since the start of last week.
One step closer to autonomous driving
Investors are reacting to the reports that Musk’s trip resulted in approval for the company to roll out its FSD software in China and to transfer data overseas. That’s a huge step for the American company, as it competes with Chinese EV makers in the world’s largest automotive market.
Tesla’s current version of FSD still requires 100% driver supervision. However, investors have long been valuing Tesla shares based on the potential that its vehicles will someday be able to operate autonomously. Musk himself has said that operating a fleet of robotaxis is where the company’s true value lies.
It should be noted that Tesla’s vehicles weren’t alone in receiving approval with China’s data security rules. Offerings from other China-based EV makers joined Tesla’s Model 3 and Model Y in passing China’s data security regulations.
But the win for Tesla could be how it parlays the development of its technology to the other countries in which it operates. Today’s stock jump seems to be anticipating those future potential developments. Regardless, it is still a step in the right direction for Tesla, and investors are cheering the news.
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Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Why Tesla Stock Rocketed Higher Today was originally published by The Motley Fool
