Tesla bounces back

Tesla elon muskREUTERS/Brendan McDermidCEO of Tesla Motors Elon Musk waves after ringing the opening bell at the NASDAQ market in celebration of his company’s initial public offering in New York June 29, 2010.

Afetr a rough start to the week, Tesla rebounded on Tuesday. Shares of the electric car maker closed up 5%, at $US265.

Tesla fell on Monday due to broad industry concerns over a slowdown in China’s luxury car market, according to various analyses.

In recent weeks, luxury car makers such as Audi have scaled back Chinese sales projections.

This is mainly due to the country’s slowing economic growth and an anti-corruption campaign that has put a damper on sales of flashy luxury cars.

In China, Tesla is exclusively a luxury car marque and is thought to be vulnerable to slowing market demand.

In other markets, the brand’s $US100,000 Model S is not seen as a pure luxury product, but rather an innovative alternative to Mercedes and BMW that operates in its own niche.

Until recently, shares of the car maker had been on a steady three-month long climb, after the stock declined to $US185 in late March.

Tesla shares hit a recent high of $US286 on July 20, following the release of a 90kWh battery pack option and a new Ludicrous Mode for the Model S.

On Monday, shares had closed at $US253.

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