Tesla has seen $200 billion added to its market cap in 2023, marking the strongest start to the year in its history

• Tesla has gained over $200 billion in market value during in the first three months of the year.
• The EV company's stock enjoyed its best weekly performance in history in January.

Tesla stock is having its best start of the year in its history, gaining over $200 billion in market value during the first three months of 2023.

Shares of the electric vehicle maker are up 78% year-to-date. Tesla's market value has increased from $388 billion at the end of 2022 to $601 billion, according to Nasdaq data on Wednesday. Shares of the company were up 2.5% to about $194 as the market headed into the close of Wednesday's session.

Tesla's strong quarter started on a broad rally in the technology sector as investors hoped high inflation was in the rearview and the Federal Reserve would soon pump the brakes on raising interest rates.

On top of that, CEO Elon Musk also told investors during the company's fourth-quarter earnings call in January that customer demand for Tesla vehicles was exceeding production. That week, the stock saw its best performance in a decade.

The massive start to the year comes after Tesla shares performed miserably in 2022, when the EV maker wiped out $700 billion in its market cap as investors pulled away from bets on high growth names. Investors, too, were put off by Musk's Twitter takeover saga, which even long-time bulls said was creating a distraction for the company.

Analysts are still bullish even after a dizzying rise in Tesla stock so far this year. Wedbush this week forecasted the company's stock will rally 13% through 2023 on a surge in deliveries after price cuts on its Model 3 and Model Y in China.

"We believe Tesla has been aggressive and strategic about its Model Y/3 price actions which have paid major dividends so far this quarter around gaining market and mind share from domestic players," Wedbush analysts said in a note Wednesday. "The macro remains uncertain and a recession could likely be on the doorstep, however Tesla is now positioned well with its price points with demand outstripping supply so far in 2023."