Tesla shares rise on Q3 earnings buzz and ‘robotaxi day’

October is set to be a critical month for Tesla. It’s been a tough year for the electric vehicle maker’s stock, but renewed optimism ahead of next week’s third-quarter earnings helped lift the stock 5% on Monday, erasing previous losses since the start of the year.

The recent change in sentiment around Tesla is due in part to the company’s status as an AI darling of several high-profile tech bulls, which has helped boost anticipation for the much-anticipated “robotaxi day” on October 10. That’s when Tesla is expected to provide updates on what it’s calling its “fully autonomous driving” software at the event, as well as show off its planned autonomous “cyber taxi.”

But to remain profitable, Tesla will need to sell cars to use that software. While the news on that front has been mixed for 2024, Barclays analyst Dan Levy predicts quarterly deliveries will be around 470,000 vehicles, up 8% from the same quarter last year and beating Wall Street expectations.

For investors, that was a welcome contrast from the previous quarter, when deliveries fell 5% year over year. Those numbers beat Wall Street expectations, briefly lifting the stock. But a disastrous earnings call a few weeks later wiped out those gains as the stock fell 12%, its worst single-day performance of 2021.

Analysts wanted to hear about falling revenues and margins. Instead, they got a long-term offer from Musk to invest in next-generation electric vehicles and AI.

Dan Ives of Wedbush Securites, a known Tesla bull, called the gains a “trainwreck.” Baird Managing Director Ted Mortonson said: Fortune thought Musk was getting defensive.

The world’s richest man may be in a better mood for the company’s third-quarter earnings call on Wednesday. Shares have rebounded and are trading just below $250, down only slightly from a 52-week high of $271. But they still lag far behind the S&P 500’s 21% gain year-to-date, and recent rounds of weak financial results have many, including Fortune Shawn Tully wonders if stocks are overvalued.

Will China’s software ban help or hurt Tesla?

The year has also been full of reports of Tesla’s market share declining in the U.S., China and Europe, though Levy said in his note that increased deliveries in China this quarter would offset overall weak electric vehicle sales in the European Union.

As a pioneer, it’s natural for Tesla’s overall market share to fall as the electric vehicle market grows. Nevertheless, the brutal price war that Musk himself started has emboldened Chinese manufacturers like BYD, which is backed by Warren Buffett’s Berkshire Hathaway, to go on the offensive.

Questions remain about how the deteriorating U.S.-China trade relationship will affect Tesla’s business. On Monday, the Biden administration announced that the Commerce Department will propose banning Chinese-developed software from all connected cars in the U.S.

The move comes after Biden announced 100% tariffs on Chinese electric vehicles in May. Tesla benefits from making and selling vehicles in both of the world’s largest markets, but it could still suffer collateral damage. The EU recently imposed an additional 9% import tariff on Musk’s cars made in China, for example, although other manufacturers such as Geely, Volvo Car AB’s parent company, and BYD have been hit much harder.

This story was originally published on Fortune.com