Tesla Global News #30

The conflict, described by Wedbush analyst Dan Ives as a “high school friends feud,” has raised fears of a tougher regulatory environment for Tesla, particularly for its autonomous driving ambitions. The loss of EV tax credits could increase Tesla vehicle prices, potentially reducing demand, with JPMorgan estimating a $1.2 billion annual profit hit. Despite a partial recovery of nearly 4% on Friday, Tesla’s stock remains down 30% year-to-date, making it the worst-performing large-cap stock of 2025.

What It Means for Investors and Consumers: The Musk-Trump spat highlights Tesla’s vulnerability to political shifts, especially as Musk’s high-profile persona influences the brand. Investors are now closely monitoring whether the feud cools, with signs of détente reported by Politico on Friday. For consumers, the potential loss of EV tax credits could make Tesla’s vehicles, like the Model Y, less affordable, with effective price increases of up to $7,500. As Tesla navigates this turbulence, its upcoming robotaxi launch in Austin could shift focus back to innovation—if it delivers.

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This week, Tesla faced downgrades from two major firms, Baird and Argus, as analysts cited growing uncertainties surrounding the company. Baird shifted its rating from “Buy” to “Neutral,” pointing to the fallout from Elon Musk’s feud with President Trump and rising competition from Chinese EV makers. Argus echoed concerns, highlighting production pauses for the updated Model Y and the recent departure of a key AI executive overseeing Tesla’s Optimus robotics project. These downgrades follow a 14% stock drop on Thursday, driven by fears of regulatory pushback and brand damage linked to Musk’s political activities.

Adding to the challenges, Tesla’s high valuation—trading at 150 times profit estimates—faces scrutiny as analysts question the feasibility of its ambitious robotaxi rollout. Baird noted that investor expectations for Tesla’s autonomous vehicle program may be overly optimistic, projecting only 6,000 robotaxis by late 2026 against Musk’s claim of “hundreds of thousands.” Operational hurdles, including supply chain risks from potential tariffs and declining sales in key markets like Europe (down 36% in Germany), further cloud Tesla’s outlook.

What It Means for Investors and Consumers: The downgrades signal caution for investors, with Tesla’s stock down 26% in 2025 despite a 70% rally over the past year. For consumers, production delays could limit access to new models, while competition from lower-cost Chinese EVs may pressure Tesla’s pricing power. The robotaxi launch this week could be a pivotal moment, but analysts warn of potential disappointment if execution falters. Tesla’s ability to refocus on its core business amid political noise will be critical.

Tesla is set to launch its highly anticipated robotaxi service in Austin, Texas, potentially as early as June 12, 2025, with approximately 20 self-driving Model Y vehicles. The debut follows years of delays and comes at a critical time for Tesla, as its stock reels from a 14% plunge tied to the Musk-Trump feud and broader market challenges. Posts on X reflect strong enthusiasm for Tesla’s autonomous ambitions, with Wedbush analysts maintaining a bullish $500 price target, citing the robotaxi program as a cornerstone of Tesla’s AI-driven future. However, the service will start with human supervision and be geofenced, limiting its initial scope.

The launch faces scrutiny amid ongoing National Highway Traffic Safety Administration investigations into Tesla’s Full Self-Driving (FSD) software, linked to safety concerns and two reported deaths. Tesla trails competitors like Waymo, which operates 250,000 weekly autonomous rides, adding pressure to deliver a flawless debut. Production pauses at Tesla’s Giga Texas factory, tied to the new Model Y rollout, and the departure of a key AI executive further complicate the company’s autonomous push.

What It Means for Investors and Consumers: For investors, a successful robotaxi launch could restore confidence in Tesla’s innovation pipeline, potentially offsetting recent losses. Musk has claimed the program could unlock “trillions” in market value, though analysts like Baird remain skeptical of rapid scaling. For consumers, the Austin pilot could offer a glimpse of autonomous ride-sharing, but regulatory hurdles and safety concerns may delay widespread adoption. Tesla’s ability to execute this high-stakes launch will be a defining moment for its AI and robotics ambitions.

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