Tesla Shares Gaining Momentum Despite Stagnant Sales Figures
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Tesla's stock has witnessed a notable surge of over $100 in the past seven weeks, reaching new heights. This upward trend, however, comes amidst challenges for the electric vehicle (EV) manufacturer, as global sales have seen a decline, and competition in the EV market has intensified.
In recent developments, Tesla's vehicle deliveries decreased by about 13.5% in Q2 2025 compared to the previous year, reflecting softer demand amid rising global competition and market saturation in regions such as Germany, France, and California. Rivals, including Waymo and Chinese EV makers, are advancing technologically and pricing competitively, eroding Tesla's market share, especially in California where Tesla's EV market share fell below 50%.
Elon Musk's political controversies have also caused consumer backlash and reduced favorable public opinion, with only 30% favorable views in a June 2025 poll and dwindling support even among Republicans. This has likely contributed to softening demand in the U.S.
However, analysts' enthusiasm for Tesla's upcoming autonomous-vehicle and robotaxi initiatives, as well as its AI businesses, has largely driven this surge in Tesla's stock. Wedbush analyst Dan Ives set a target price of $350 for Tesla shares, citing the anticipated launch of a limited robotaxi service in Austin, TX. Morgan Stanley analyst Adam Jonas believes the social pressure on Tesla may be waning.
Tesla is expanding its horizons beyond EV manufacturing, with plans to launch Optimus, a humanoid robot designed to handle tasks that are "dangerous, repetitive or boring" for humans, powered by Tesla's in-house AI and Dojo supercomputing platform. The first application for Optimus will be Tesla's own vehicle factories.
Investors increasingly value Tesla not just as a BEV automaker but as an AI, energy (battery storage), and robotics platform. Jonas outlines an optimistic scenario where Tesla shares could reach $800 per share, assuming significant growth in robotaxi revenues, AI-driven ventures, and robotics.
Despite the strong momentum in 2024, Tesla's share price has faced challenges, including a double-digit revenue drop in Q2 2025 and softened EV demand in key markets like the U.S. Analyst consensus suggests a hold position with modest upside potential for the near term, projecting a 10% price increase by year-end 2025 and more significant gains longer term contingent on revenue growth and technological advances.
In an effort to move its 2025 Model Y inventory, Tesla has resorted to significant discounts. Despite this, Tesla sold 58,459 vehicles in China in April, marking a 6% decrease from the previous year. In Q1 2025, Tesla's U.S. sales fell approximately 15% year-over-year.
Elon Musk confirmed his exit from Washington, DC, last week, stating he will do less political spending in the future. Musk's reduced political activity may have contributed to the softening of public opinion, as well as the decline in sales.
In summary, Tesla's stock is currently pressured by sales declines, intensified competition, and detrimental effects from Elon Musk’s reduced political activity and related public backlash, though future growth prospects remain linked to innovation and expansion into AI, energy, and robotics.
- Despite the ongoing challenges in sales, competition, and Elon Musk's political controversies, the surge in Tesla's stock is largely driven by analysts' enthusiasm for Tesla's forthcoming autonomous-vehicle and robotaxi initiatives, as well as its AI businesses.
- As Tesla expands its focus beyond electric vehicle manufacturing, with plans for Optimus, a humanoid robot, and the use of its in-house AI and Dojo supercomputing platform, investors increasingly value Tesla as an AI, energy, and robotics platform, with some analysts predicting Tesla shares could reach $800 per share.
