Tesla stock (NASDAQ: TSLA) soared by over 50% after suffering a two-year low on the first trading day of this year. Interestingly, the growth occurred just before Tesla released its quarterly and full-year results for 2022.
The sharp decline in Tesla stock in 2022
Tesla stock substantially declined by 65% of its market valuation, as per Nasdaq. Numerous factors apparently affected this occurrence, including the following:
- The volatility of the tech and auto industry
- Increasing vehicle costs
- Delays in some product releases
- CEO Elon Musk‘s Twitter purchase and occupation
That said, 2022 was indeed a tough year for Tesla investors as their holdings kept decimating. Finally, Tesla stock is now starting to recover from its 2022 lows.
Tesla stocks rebound in less than a month in 2023
Prior to the company’s Q4 and FY 2022 Earnings Call on January 25, Tesla stocks had already increased by 36%. Tesla was able to surpass EPS forecasts and delivered a great performance. Meanwhile, it fell slightly short of Wall Street’s forecast.
Remarkably, Tesla stocks increased by about 10% prior to the market opening on January 26. Moreover, the stock is up more than 3% as of January 27 at 9:55 AM on the East Coast, which started at $159.96.
What caused Tesla stocks to rebound?
Apparently, the major price cuts recently implemented by Tesla in some of its key markets affected the stock’s recovery. The move brought back vehicle affordability for customers in America and other regions with the price cuts.
According to the data, the addressable markets for the Model 3 and Model Y dramatically grew due to the price cuts. Moreover, the tax incentives under the Inflation Reduction Act allow buyers to enjoy more than $20,000 discounts when used together with Tesla’s price cuts.
“It was a fantastic year for Tesla. It was our best year ever on every level.”
CEO Elon Musk
Indeed, 2022 was a challenging but great year for Tesla. Tesla demonstrated why it is recognized as the most valuable automaker in the world despite its setbacks. In the midst of investor skepticism, it proved its ability to bounce back from significant drops.
