Tesla plans to increase production at its German plant in the second half of the year due to higher-than-expected demand, according to plant manager André Thierig. Production estimates for upcoming quarters have been raised, but no specific numbers have been shared. This production increase comes despite recent weaker sales data, with new Tesla registrations in Germany falling by 39% last month and 56% for the year so far. Other European countries such as France, Belgium, Denmark, and Sweden saw similar declines, although Norway experienced double-digit growth. The drop in numbers has been linked to changes in Model Y production at the Berlin facility. Even with these sales drops and production issues, Tesla’s updated production goals for its German plant might create a positive outlook after recent stock price increases. However, the planned production boost clashes with the negative sales data we’ve seen in Europe. This gap between the optimistic future projections and recent poor performance is likely to lead to more market volatility. Traders should prepare for a wider range of potential stock price movements as we approach the Q3 delivery report. For those with a bullish outlook, this news suggests that the earlier sales slump in 2025 was a temporary supply issue rather than a demand problem. A trader might consider buying call options that expire after the next earnings call in October, betting on a strong Q4 forecast that aligns with management’s expectations. This perspective is backed by recent data from the European Union, which showed a modest 1.5% recovery in overall EV registrations in August 2025 after a slow summer. On the other hand, those who are bearish might be skeptical of the increased production guidance, viewing it as a ploy to improve sentiment. They may buy put options, believing that the sales weakness is genuine and driven by rising competition. According to August 2025 market share reports, rival companies have gained over 8% market share in Germany and France this year. The upcoming delivery numbers will be crucial in determining if the factory is making cars that consumers actually want. Given the uncertainty, a volatility-focused strategy may be the best choice. Historically, Tesla’s stock has moved more than 15% in either direction after key announcements, particularly following the Q1 and Q2 earnings reports in 2024. A long straddle—buying both a call and a put option with the same strike price and expiration date—could profit from any significant price movement, regardless of whether the production news or the sales data turns out to be the more accurate signal.

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