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Why is Tesla’s share price defying the market?


Tesla's share price continues its bull run despite the broader NASDAQ-100 falling.

Overnight, Tesla's share price climbed 0.48% following a 2.2% gain the night before, moving within reach of US$800 a share at the same time as more than a quarter of the NASDAQ-100 has fallen into a bear market.

What gives?

The yield on the 10-year U.S. Treasury note rose to 1.48% from 1.45% on Monday, signalling higher interest rates.

While the move up sounds small, rising interest rates have a large impact on tech stocks because they reduce the current value of the profits those companies are expecting in the future.

However, as the broader tech market keeps falling, Tesla has remained resilient.

Disruptive technology

The car manufacturer's growth could be related to its latest disruptive development.

The company took another step forward in its self-driving beta.

Over the weekend, Tesla CEO Elon Musk, highlighted an update to the company's electric car software via his social media.

"FSD Beta request button goes live tonight, but FSD 10.1 needs another 24 hours of testing, so out tomorrow night," the CEO took to twitter to inform Tesla drivers.

The in-car computer now offers a button to request access to the ongoing full self-driving beta program.

Touching the button brings up a disclaimer that Tesla will evaluate your performance as a driver to determine eligibility.

While the program is not without controversy, with drivers needing to sign a non-disclosure agreement and are being discouraged from sharing video clips that show the driver assistance made a mistake, the new technology has been viewed as a bullish sign for investors.

Under the program's new bundle, drivers will receive a new "Tesla Safety Score", which is a report card for drivers' habits, with the better scores being rewarded by gaining access to join the beta program.

Tesla bulls saw the implementation of the new technology as another disruptor, as it could have an impact on the insurance sector.

Drivers who achieve a higher safety score could theoretically end up paying less for premiums as they are less likely to have accidents, reducing the risk of having insurance pay out.

While this could be bad news for insurance companies it could be the latest win for the car company.

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