Why Tesla and Polestar shares rose, but Nikola fell in September

The first half of the year was largely negative for electric vehicle (EV) investors. Increasing competition, continued consumer hesitancy over a lack of charging infrastructure and difficult economic conditions in many countries have slowed sales growth for names including the EV leader adze (TSLA -4.03%).

But sentiment began to change in the third quarter, and some EV stocks rallied. Tesla shares, for example, rose 22.2% last month, according to data provided by S&P Global Market Intelligence. Even the new EV Polestar Automotive (PSNY -0.03%) shares rose 41%. One exception was the manufacturer of heavy-duty electric trucks Nicholas (NKLA -5.75%). Its shares fell nearly 31 percent, but the stock reversed course at the end of the month, recovering about half of its September losses in the past week.

The rally in Tesla shares has erased most of the losses since 2024. Investors have become bullish on Tesla’s Q3 delivery report as well as the upcoming Robotaxi update event expected on October 10.

EV investors are looking for winners

Tesla’s vehicle sales returned to growth in Q3. After shipments in the first half of 2024 fell 6.5% from 2023, the company’s nearly 463,000 shipments in Q3 were up 6.4% from last year. But that didn’t satisfy investors, and Tesla’s stock fell through October. That’s because it still doesn’t seem likely that Tesla will hit its goal of 2 million electric vehicle deliveries this year. It would need over 700,000 units in Q4 for that to happen.

But investors had another reason to send Tesla shares higher last month as well. Anticipation for what CEO Elon Musk will say at his upcoming Robotaxi event is high. Investors will be listening closely on October 10, when the company will provide its vision for when it could see significant monetization of its software with profit and autonomy. Earlier this week, Tesla analyst Dan Ives of Wedbush wrote: “We believe Robotaxi Day will be (a) seminal and historic day for Musk and Tesla and marks a new chapter of growth around autonomy, FSD (full self-driven ). and (a) future AI (artificial intelligence) at Tesla”.

Investors also rewarded Polestar for its delivery upgrade in September. At the end of August, the Volvo subsidiary reported an 82% sequential increase in electric vehicle deliveries in Q2 compared to Q1. Investors poured into the stock after that report. Polestar has also had a relatively high 7.6% of its shares sold short since mid-September, which likely contributed to a brief rally in those shares.

Nikola is in a different segment of the electric vehicle business. Its heavy duty trucks powered by hydrogen fuel cells aim to create an entirely new market space. The stock is down 80% year-to-date as the company has been forced to raise capital while it works to build fueling infrastructure for those trucks.

But sales are growing and investors reacted positively when Nikola said it wholesaled 88 trucks to its dealers for sales to end users in Q3. Nikola wholesaled 200 hydrogen fuel cell trucks to dealers in the first three quarters of the year.

Nikola still needs to grow infrastructure, and its trucks compete with Tesla’s battery-powered semi-electric trucks. That makes it the riskiest of these three names and helps explain why the stock has fallen so much so far this year.