Tesla Inc. ( TSLA )  shares rose by 1.38% early Monday, hovering near the $400 mark, ahead of the bell, according to Benzinga Pro. This increase follows Tesla’s announcement of a new, affordable vehicle model during an investor meeting with Deutsche Bank.

What Happened: The electric vehicle giant revealed plans for the Model Q, a sub-$30,000 car, targeting the Chinese market. The Model Q aims to compete with the BYD Dolphin and Volkswagen ID.3.

Tesla’s stock also reached $401.16 in Robinhood‘s overnight trading, nearing its record high of $407.36 from November 2021.

On Friday, Tesla’s shares closed at $389.22, marking a 5.34% gain. The recent surge is attributed to positive analyst reports, particularly from Bank of America Securities. The firm increased its price target for Tesla from $350 to $400, maintaining a “buy” rating. BofA Senior Automotive Analyst John Murphy highlighted insights from a visit to Tesla’s Texas gigafactory and the latest Full Self-Driving software as influential factors.

See Also: Google CEO Sundar Pichai Fires Back At Microsoft Over AI, Dismisses Satya Nadella’s Criticism: ‘I Would Love To Do A Side-By-Side Comparison…Any Day, Any Time’

Why It Matters: The announcement of the Model Q is part of Elon Musk’s strategy to expand Tesla’s reach in the competitive Chinese market. The new model is expected to enhance Tesla’s market share against local competitors like BYD and international players such as Volkswagen. This move aligns with Tesla’s ongoing efforts to innovate and capture new segments, as seen with the recent unveiling of the Cybercab, a vehicle designed for autonomous driving without traditional controls.

Additionally, Qraft Technologies, a South Korean fintech firm, has increased its investment in Tesla, reflecting confidence in Musk’s momentum and the company’s growth potential. This decision comes after a significant 40% rise in Tesla’s shares in November, despite challenges faced during the Robotaxi event in October.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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