Here's Why Tesla Shares Accelerated Higher in September

Key Points

• Elon Musk's massive stock purchase was well received by the market.

• Tesla's EV sales bounced back strongly in the quarter, and investors likely anticipated this trend through September.

• Tesla continues to secure approvals as it expands its robotaxi rollout.

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Shares in Tesla (NASDAQ: TSLA) surged by a remarkable 33.2% in September, according to data provided by S&P Global Market Intelligence. The move is primarily a result of an accumulation of positive newsflow throughout the month, rather than any one overarching event.

Three reasons Tesla stock soared in September

First, CEO Elon Musk purchased approximately $1 billion worth of stock in the open market on Sept. 12, which helped boost confidence in the company's future. Musk's leadership of Tesla and the fact that the real value in the company lies in technology that hasn't been fully developed or even approved for widespread commercial operation mean that his words on the company matter.

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And his actions matter even more. As such, investors took heart from his substantial stock purchase.

Second, as every Tesla investor and potential Tesla vehicle owner in the U.S. is aware, the federal tax credit for electric vehicles (EVs) (both new and used) expired on Sept. 30, and the market was well aware that there would be a pull-forward of EV purchases before the expiry. However, the question was over the quantum of the pull forward. The question was further complicated by the Model Y refresh that took place earlier in the year and its potential impact on sales.

While Tesla doesn't break out sales from its Model 3 and Model Y sales (its two best-selling models), the delivery data for Model 3/Y for the third quarter came in significantly ahead of the Wall Street consensus, with 481,166 deliveries in the quarter, up by 9.4% from the 439,975 reported in the third quarter of 2024.

Image source: Getty Images.

Third, Tesla's EVs are only part of the investment case for the stock, but most investors attribute more value to the potential of the robotaxi business. Fortunately, the rollout continues, and in September, transportation authorities in two new states, Arizona and Nevada, gave approval for Tesla to start testing autonomous vehicles on public roads.

Where next for Tesla

The pull forward in EV sales in the third quarter could lead to a significant decline in the fourth quarter. However, Tesla plans to introduce a lower-cost model in the fourth quarter, which could boost delivery growth. At the same time, if Tesla can build momentum with the robotaxi rollout ahead of an approval for a fully autonomous robotaxi service, the stock is likely to find favor with investors.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.