What happened Shares of electric-car company Tesla (NASDAQ: TSLA) jumped on Tuesday, rising as much as 9.9%. As of 2:50 p.m. EDT, the stock had settled to a 4.9% gain. The move was likely fueled by combination of a gain in the overall market following a huge sell-off on Monday and a report from Reuters, noting that the automaker has submitted a document to the Shanghai government detailing plans to increase production capacity on some parts for its vehicles made at its China-based factory. The interior of a Tesla Model 3. Image source: Tesla. So what As of 2:50 p.m. EDT, the S&P 500 was up about 2.8%. This followed the index's nearly 8% decline on Monday. Shares of Tesla also fell sharply yesterday, declining about 14%. The stock's rise on Tuesday, therefore, may primarily reflect a rebound in the electric-car maker's share price. But a report that Tesla is aiming to increase production capacity of some parts at its factory in Shanghai, including nearly doubling the annual capacity of cooling parts for hits Model 3 in the market to 260,000 units per year, may be fueling optimism for the automaker as well. This news suggests that demand may be strong for its China-made vehicles. Now what Tesla had said in its fourth-quarter update that it had installed capacity at its factory in Shanghai for a production rate of 150,000 Model 3 units per year. With Tesla reportedly planning to increase production of some parts, could demand for the vehicle in the important market be greater than expected? Find out why Tesla is one of the 10 best stocks to buy now Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* Tom and David just revealed their ten top stock picks for investors to buy right now. Tesla is on the list -- but there are nine others you may be overlooking. Click here to get access to the full list! *Stock Advisor returns as of December 1, 2019 Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.Source