(News Bulletin 247) – The action of the car manufacturer has regained more than 68% since January 1, allowing Elon Musk to once again become the richest man in the world. The stock benefited from a renewed appetite for depreciated values ​​but also from reassuring signals on demand.

Elon Musk has regained his crown as the richest man in the world. The businessman, entrepreneur and owner of Twitter rose overnight from Monday to Tuesday ahead of Bernard Arnault in Bloomberg’s real-time ranking, with a net worth valued at 187 billion dollars, against 185 billion for the CEO. from LVMH. Since the beginning of 2023, the fortune of Elon Musk has regained 50.1 billion dollars against 23 billion for Bernard Arnault.

The recent course of Tesla action is obviously no stranger to the skyrocketing rise of the billionaire, who is also CEO of the automaker. Even though he has repeatedly discarded Tesla shares in 2021 and 2022, Elon Musk still owns more than 13% of the capital of the number one in electric vehicles, which represents around 85 billion dollars.

However, over the whole of 2023, the Tesla share has recovered 68.6%, an increase which even peaks at around 90% by taking a low point on January 5. At the same time, LVMH, despite the reopening of China and record annual profits, has gained “only” 17% since January 1.

Calm on growth stocks

Obviously the rise of Tesla deserves to be put into perspective. Penalized by many factors, including the fear that Musk’s management of Twitter will negatively affect the image and performance of the automotive group, Tesla had seen its share price plunge last year. Over one year, the action still lost nearly 30%.

However, the rebound remains palpable. Tesla was buoyed by the market recovery at the start of the year, which benefited many stocks that had been battered in 2022, as investors returned to scrapping valuations. This is the case, for example, in France for the automotive supplier Faurecia, up 50% since the start of the year, after having suffered the sixth largest drop in the SBF 120 in 2022 (- 62.7%).

In addition, hopes of an upcoming lull in key rate hikes from the US Federal Reserve have supported tech stocks, which Tesla is often equated with. Due to their high valuations, these growth stocks are very sensitive to rate expectations.

Well-oriented demand

But Tesla’s rebound is probably not only due to market phenomena. The group, which had cut its prices in Europe and the United States to heal its volumes in early January, sent reassuring signals about demand. This while it is supposed to hold an ambitious objective of average annual growth of its deliveries of 50% in the medium term, which it missed in 2022.

Elon Musk explained at the end of January that the price cuts had created a real difference, stressing that orders for the month of January had represented approximately double its production. He also hinted that the group’s global production could approach 2 million vehicles this year.

Consumers seem to have actually followed suit. To the point that Tesla, according to UBS, had to adjust the prices of its Model 3 and Model Y in the States upwards. The Swiss bank thus underlines “the strong response” of demand in the country following the price cuts of January.

Same pattern in China where Tesla has also, according to Reuters, started to very slightly increase the prices of the Model Y. In a recent note, the research office Wedbush estimated that the American group was just beginning to benefit from an acceleration electric vehicle sales in the world’s second-largest economy, noting that Chinese consumers favored Tesla’s products over those of local players like BYD or XPeng.

An investor day on Wednesday evening

“We expect traditional automakers to struggle to make their electric vehicles profitable in this highly competitive market environment, given Tesla’s cost structure advantage over its global counterparts,” he said. UBS.

Beyond China, “we believe there is strong demand for Tesla products, even in the face of increased competition in electric vehicles,” said Tom Narayan, analyst at Royal Bank of Canada, quoted by Bloomberg.

Lately, the action has been on a good trend, with an increase of 5.5% on Monday and a small increase of 0.5% this Tuesday at the start of the session. THE wall street journal evokes the possibility that market operators buy the title ahead of an important event, namely the holding, Wednesday evening, of a day dedicated to investors.

In a note released in late January, UBS expected the event to be a catalyst for the stock, with potentially announcements of a new platform and vehicle with a price below $30,000 that “could more than doubling” Tesla’s addressable market. Quoted by Barron’s, Barclays nevertheless fears that the market will “sell the news” on Thursday, the session which will follow the day of the announcement.