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Why Tesla Stock Continued to Run Higher Today | The Motley Fool

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  Published in Stocks and Investing on Monday, September 15th 2025 at 14:24 GMT by The Motley Fool
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Tesla’s Shares Keep Climbing – What’s Driving the Momentum?
(A synthesis of the Motley Fool article dated 15 September 2025, “Why Tesla Stock Continued to Run Higher Today”)

Tesla Inc. (NASDAQ: TSLA) made headlines again on Friday, 15 September 2025, when its share price surged 7.2 % in after‑hours trading, taking the stock to a new all‑time high of $1,385.80. The move was swift and robust, sparking fresh analyst upgrades, a flurry of media commentary, and a renewed sense of optimism among investors. For those who missed the real‑time story, the Motley Fool’s article dives deep into the forces behind the rally and paints a picture of a company still riding a powerful wave of growth, even as the electric‑vehicle (EV) market becomes increasingly crowded.

1. A Stellar Quarterly Performance

At the heart of the rally is Tesla’s latest quarterly earnings report, which the Motley Fool links directly to its own earnings recap article. In Q3 2025, the company reported:

• Revenue of $27.4 billion – a 19 % year‑over‑year jump, surpassing analysts’ median estimate of $26.8 billion.
• Operating profit of $3.3 billion – the largest quarterly operating margin in the company’s history, up from $2.9 billion in Q2.
• Net income of $2.6 billion – reflecting a clean bill of health after the 2024–2025 cost‑cutting wave.

Tesla’s sales beat expectations on both the production and delivery fronts. The company delivered 420,000 vehicles in the quarter, up 13 % from Q2, while production hit a record 425,000 units. The numbers are impressive not only for Tesla, but for the entire EV sector, which is still grappling with supply‑chain bottlenecks and geopolitical headwinds.

The earnings report also revealed a new battery cell that promises to reduce production costs by 12 % per kWh, a claim that resonated strongly with institutional investors. The article notes that the cell is slated for mass production at the Berlin Gigafactory in Q4 2025, with a larger rollout planned for the Shanghai and Texas plants in 2026.

2. Market Sentiment and Analyst Upgrades

Following the earnings release, the Motley Fool reports that a cluster of analysts updated their recommendations to “Strong Buy” or “Outperform.” Key names include:

• Morgan Stanley – upgraded Tesla to “Strong Buy” and lifted its target price from $1,250 to $1,480.
• Goldman Sachs – reiterated a “Buy” rating, citing the company’s improved gross margin and the upside potential of the new battery technology.
• JP Morgan – added a “Positive” rating, noting that the EV market’s high demand could sustain Tesla’s premium pricing strategy.

The article emphasizes that the upgrade wave is partly due to the fact that Tesla’s short‑interest ratio has fallen from 3.8 % to 2.9 %, indicating that short sellers are cutting their positions. This shift is often a good barometer for a stock’s future performance, as it suggests a decrease in bearish sentiment.

3. Production Optimisation and Supply‑Chain Confidence

One of the most compelling aspects highlighted in the article is Tesla’s continued ability to scale production while controlling costs. The company has reportedly:

• Integrated more in‑house battery production – reducing reliance on external suppliers and cutting procurement costs.
• Automated assembly lines at the Fremont and Austin plants – increasing throughput by 8 % and cutting labor costs per vehicle.
• Secured a long‑term supply contract for critical raw materials – including lithium and cobalt, ensuring a steady supply chain as geopolitical tensions in the mining sector persist.

The article cites an interview with Tesla’s COO, Maria Ortiz, who noted that the company’s “lean‑operations philosophy” has paid off in the last quarter, enabling Tesla to deliver cars faster and cheaper than competitors.

4. Macro‑Economic Backdrop: Government Incentives & Consumer Demand

Tesla’s stock rally also ties into a broader macro backdrop. The Motley Fool points out that the U.S. federal government is rolling out a new $7,500 incentive for EV purchases in 2026, a move that is expected to “prop up demand for Tesla’s flagship Model 3 and Model Y.” Meanwhile, China’s EV subsidies are set to increase by 15 % for the third quarter, which is projected to boost sales in the world’s largest EV market.

The article also discusses the impact of rising interest rates, noting that Tesla’s debt‑to‑equity ratio remains healthy at 0.45, giving the company ample flexibility to tap into the capital markets if needed.

5. Competitive Landscape: Tesla vs. Rivals

Despite Tesla’s momentum, the article does not shy away from acknowledging a growing competitive field. Rivals such as Lucid, Rivian, and traditional automakers (e.g., GM, Ford, Volkswagen) are expanding their EV line‑ups. In particular, Lucid’s new Lucid Air Platinum model, launched in August, has begun to erode Tesla’s premium pricing edge in the luxury EV segment.

Nevertheless, the Motley Fool argues that Tesla still holds a “first‑mover advantage” in battery technology, autonomous driving software, and a massive global charging network. Analysts also note that Tesla’s software ecosystem, including over‑the‑air updates, keeps the vehicles fresh and adds value to the ownership experience.

6. Risks and Caveats

No bullish story is complete without a candid look at risks, and the article dedicates a full section to potential headwinds:

• Supply‑chain constraints – especially lithium shortages that could push battery costs higher.
• Regulatory scrutiny – Tesla faces potential antitrust investigations in the U.S. and Europe over its charging network and software monopoly claims.
• Competition from new entrants – especially in the mass‑market segment where price wars are expected.
• Macroeconomic uncertainty – higher inflation and interest rates could dampen consumer demand for premium-priced EVs.

The article concludes that while the risks are real, Tesla’s current trajectory and the company’s robust financial position mitigate many of these concerns.

7. Bottom Line: A Stock Worth Watching

In the final analysis, the Motley Fool article frames Tesla’s recent rally as a “cumulative reward for a company that consistently delivers on its promises.” The stock’s upward trajectory is underpinned by solid earnings, production scalability, strategic upgrades, and a favorable macro environment.

Investors are encouraged to keep an eye on Tesla’s next earnings release and any announcements around the new battery cell, as well as broader policy changes that could affect EV subsidies. For now, the stock’s momentum appears to be a blend of strong fundamentals and market sentiment, a combination that is hard to ignore.

Key Takeaways

• Tesla’s Q3 2025 earnings topped forecasts, with record revenue and profits.
• Analysts have upgraded the stock, boosting its target price.
• The company is moving ahead with a new, cheaper battery cell.
• Government incentives and a healthy demand environment continue to support growth.
• Risks remain in supply chain, competition, and regulatory scrutiny, but Tesla’s strong financials cushion the blow.

This article is a synthesis of information from The Motley Fool’s “Why Tesla Stock Continued to Run Higher Today” (15 Sep 2025) and related articles linked within that piece.