Tesla's stock rises as investors get a fresh sign that high gas prices are driving EV sales

By William Gavin

Tesla and its Chinese rivals saw record unit sales in the region last month

Tesla's sales of China-made cars are improving this year, following a turbulent 2025.

Tesla shares were rising on Thursday on the heels of the latest signs of sales momentum in China.

The electric-vehicle maker in April saw 79,478 deliveries of Model 3 and Model Y cars built at its Shanghai plant, according to new data from the China Passenger Car Association. That total, which includes cars sold in China as well as cars exported abroad, was 36% higher than a year earlier.

Tesla (TSLA) sold about 7% fewer China-made electric vehicles in April compared with the previous month, but its year-over-year gains show signs of progress in one of its biggest markets. Last year was rough for Tesla, with only a few months in 2025 when the company recorded year-over-year sales growth.

Tesla shares were up about 3% on Thursday morning.

In a statement, the CPCA said several carmakers, including Geely Automobile (HK:175), Tesla and Xiaomi (HK:1810), had achieved record sales for the month of April. Overall, new-energy passenger car sales grew 7% in April compared with a year earlier.

Rising gas prices resulting from the Middle East conflict have helped spur demand, according to the industry group. Consumers were also impressed by new models shown at the Beijing Auto Show, which ended a few days ago.

Experts have told MarketWatch that U.S. consumers have also been more interested in EVs as gas prices remain high. In China, truck drivers are showing interest in swapping out their gas-guzzlers for electric trucks, according to reports.

Don't miss: Here's how much EV drivers say they're saving on fuel as gas tops $4 a gallon

The higher gas prices are driving exports to Europe, according to the CPCA.

Tesla's sales in Europe grew 84% in March compared with a year earlier, according to the European Automobile Manufacturers' Association. And some European countries, such as France, have reported gains for Tesla in April as well.

Last month, regulators in the Netherlands approved the use of Tesla's Full Self-Driving (supervised) software in the country, which Chief Financial Officer Vaibhav Taneja has said could set the company up for European Union-wide approval in the current quarter. Tesla also has limited approval for FSD in China.

"The broader approval is still not there, but we're working with the regulators in the country, and we're hoping that we can get approval by Q3," Taneja said on a call with investors last month. "With these approvals coming through, we expect the broader adoption of the software in the existing fleet and incremental demand for our vehicles."

See more: Tesla just hit a 'symbolic' self-driving milestone. Real-world success will be tougher.

-William Gavin

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05-07-26 1201ET