Tesla stock is moving higher, advancing more than 20% in May, as investor focus is squarely on the expected robotaxi service launch coming on June 12. However, the ongoing feud between Chief Executive Elon Musk and President Donald Trump is weighing on shares.
Tesla stock jumped 3.7% to 295.14 during Friday's stock market action after sinking 14.3% to 284.70 on Thursday. The stock fell below its 21-day exponential moving average, the 200-day moving average and 50-day line as Trump threatened to terminate Musk's government contracts on Thursday.
The drop Thursday could be read as a warning that the upcoming Tesla robotaxi launch is a risk event that could trigger huge moves, and not necessarily on day one.
CFRA analyst Garrett Nelson wrote late Thursday that "Musk is genuinely upset about the projected deficits and other aspects" of the current tax bill.
"However, we think the stock's sell-off reflects a number of other factors: an unjustified run-up following its Q1 earnings release, ongoing market share losses in China and Europe, and a realization that next week's Robotaxi launch in Austin could disappoint," Nelson said.
"Similar to other major Tesla events in the past, shares have appreciated sharply leading up to the event, raising the probability of a 'sell the news' reaction. We remain at Hold, expecting more volatility in the near term. Buckle up!" Nelson added.
Musk has repeatedly criticized Trump's tax bill this week. Musk — who just left the White House officially on May 30 — on Wednesday posted to X urging people to contact members of Congress and to "kill the bill."
However, the feud between Musk and Trump went into overdrive on Thursday.
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Musk And Trump Feud Online
Speaking from the White House, Trump told reporters Thursday that Musk is angry the administration decided to eliminate Biden-era EV credits as well as the decision to move away from a Musk-backed head for NASA.
"Look, Elon and I had a great relationship. I don't know if we will anymore," Trump said.
"Elon is upset because we took the EV mandate, and you know, which was a lot of money for electric vehicles," Trump said Thursday. "And you know, they're having a hard time, the electric vehicles, and they want us to pay billions of dollars in subsidy."
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"Elon knew this from the beginning," Trump added, referring to the administration's goal to cut the Inflation Reduction Act tax credits.
Trump went on to say that Musk "knew every aspect of this bill" but "developed the problem when he found out that we're going to have to cut the EV mandate because that's billions and billions of dollars."
"It really is unfair. We want to have cars of all types," Trump said.
Musk responded on X claiming that this was "false."
"This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it," Musk wrote Thursday.
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"Whatever. Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill," Musk added.
The Tesla chief also claimed that without him and his funding "Trump would have lost the election."
"Such ingratitude," Musk wrote on X on Thursday.
Trump then struck back with posts on his social media platform, Truth Social.
"Elon was 'wearing thin,' I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY," Trump wrote Thursday.
"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was surprised that Biden didn't do it!" Trump added.
A big part of the postelection bull thesis is that Musk's close alliance with Trump would benefit Tesla and SpaceX via government contracts and favorable regulation.
Musk would not be outdone in the online war of words Thursday.
"Time to drop the really big bomb," Musk wrote on X, before adding that Trump "is in the Epstein files. That is the real reason they have not been made public."
"Have a nice day. DJT!" Musk said.
Tesla And The Trump Tax Bill
The back and forth between the Tesla chief and the president came after Musk took to X on June 3 to criticize the bill that is currently in the U.S. Senate. The legislation is broad in scope and repeals several Biden-era tax credits and policies aimed at supporting EV adoption.
"I'm sorry, but I just can't stand it anymore," Musk wrote on X Tuesday. "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it."
Musk quickly added that the Trump tax bill will "massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America (sic) citizens with crushingly unsustainable debt."
Trump's House-passed tax bill would hit Tesla in several ways as it does away with major portions of former President Joe Biden's Inflation Reduction Act, known as the IRA. This includes tax credits of up to $7,500 for EV purchases among many other incentives.
While the tax and spending bill would repeal many EV incentives, it also includes a provision for the Federal Highway Administration to impose a $250 annual fee registration for an EV vehicle and a $100 annual fee for hybrid vehicles.
This provision aims to make sure that EV operators pay to maintain U.S. roads in lieu of a gasoline tax. Thirty-seven states already collect annual EV fees ranging from $50 to $250 a year.
The House Republican tax bill also restricts and phases out the IRA's "advanced manufacturing production credit."
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The bill also would strip away IRA clean-energy storage provisions, such as the clean electricity investment credit. Under current law, there is a credit for qualified investment in an electricity facility or energy storage technology.
The House-passed bill would phase out the clean electricity investment credit. In the bill, there is a 20% credit reduction for facilities placed in service in 2029, a 40% reduction for facilities placed in service in 2030, and a 60% reduction in 2031. The tax credit terminates at the end of 2031.
Tesla has taken advantage of these IRA provision for its battery storage business.
Meanwhile, the House bill also eliminates the residential clean energy credit at 2025's end.
"Abruptly ending the energy tax credits would threaten America's energy independence and the reliability of our grid," Tesla on May 28 posted to its official X page.
Tesla Stock: The Robotaxi Rollout
Other than the Musk-Trump drama, Tesla investors are also looking at the robotaxi service launch.
A somewhat clearer image is taking shape of what the Tesla robotaxi rollout will look like. Bloomberg reported last week that Tesla will launch the limited robotaxi service in Austin on June 12. The report was based on a "person familiar with the matter."
Tesla tested a Model Y with no one in the driver's seat for the first time last week, according to the Bloomberg report. Musk on X early on May 29 wrote that "Tesla has been testing self-driving Model Y cars (no one in the driver's seat) on Austin public streets with no incidents" in recent days.
Musk added that Model Y vehicles will begin "self-delivery from factory to customer" in June.
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Morgan Stanley analyst Adam Jonas on May 30 pointed out there is a publicity campaign on Musk's social media platform X around the Austin robotaxi day. However, Jonas cautioned investors to temper expectations.
"As is typical for highly anticipated Tesla events, we would keep expectations well contained for the (reported) June 12 Cybercab launch event in Austin," Jonas wrote Friday.
"However, we would look for a continued stream of updates for the performance and growth of the network thereafter (numbers of cars, miles, trips, etc.) in the days and weeks that follow," he added.
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More Robotaxi Details
The comments from Jonas comes after the analyst recently met with Tesla executives. On May 16, Jonas wrote that the robotaxi service will likely be around 10 to 20 cars, on public roads and be invite-only with plenty of tele-ops to ensure safety levels.
Meanwhile, Musk, recently speaking with CNBC, said there will be about 10 robotaxi Model Ys in the first week and that there could be 1,000 units in a "few months." At the time, Musk did not give a specific date for the rollout, but said it would come before end of June.
The Tesla chief also confirmed there will be human supervisors for the autonomous trips. Musk also said the robotaxi service will be geofenced, meaning portions of Austin will be unavailable.
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During the first-quarter earnings call in April, Musk also made it clear during that call that the robotaxi vehicles in Austin will be Model Ys.
"We expect to be selling fully autonomous rides in Austin in June," Musk said. "The team and I are laser focused on bringing robotaxi in Austin in June." He added that "unsupervised autonomy will first be solved for the Model Y in Austin."
Separately, the CyberCab product is on track for production next year, according to Tesla. The CyberCab will use the "unboxed" manufacturing system (a modular approach). Tesla executives said on the company's first-quarter earnings call that the unboxed process is "progressing," suggesting it's not yet ready.
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"There are some challenges, and I expect that this year will be, probably be some unexpected bumps this year, but I remain extremely optimistic about the future of the company. The future of the company is fundamentally based on large scale autonomous cars and large scale, large volume, vast numbers of autonomous human robots," Musk said during the April 22 call on the current state of Tesla.
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Nvidia Chief Executive Jensen Huang heaped praise on Elon Musk and Tesla last week.
In an interview with Bloomberg on May 28, Huang said that he plans to "build many more computers together" with Musk and Tesla.
"His self-driving car, his Optimus. Every single one of them world class, every single one of them revolutionary. Every single one of them are going to be gigantic opportunities," Huang said.
"The Optimus opportunity is just around the corner. It's very likely that humanoid robots are going to be robots that we can deploy into the world relatively easily, and this is the first robot that really has a chance to achieve the high volume and technology scale necessary to advance technology," Huang said.
"I think this is likely the next multitrillion dollar industry and I'm very excited for him" the Nvidia head added, referring to Musk.
Tesla and Musk are major customers of Nvidia chips.
Musk has long been bullish on Optimus, and projects the company could be selling units sometime in the first half of 2026. The Tesla chief executive has also repeatedly stated that long term, Tesla's value will come from Optimus.
"Long term, Optimus will be overwhelmingly the value of the company," Musk said at the end of 2024.
Tesla Stock: Q1 Earnings At A Glance
The EV giant on April 22 reported that Q1 EPS sank 40% to 27 cents per share while revenue fell 9% to $19.335 billion. Musk brand damage appeared to take a toll on sales and the refreshed Model Y began rolling out late in the quarter. Tesla pulled its target for delivery growth in 2025.
Meanwhile, auto gross margins excluding regulatory tax credits came in around 12.5%, marking the lowest auto gross margins since Q2 2012 when Tesla delivered 5,612 vehicles.
Operating income was $399 million. But excluding regulatory credits of $595 million, Tesla had an operating loss.
Tesla, in its earnings statement, said a "pilot" robotaxi launch will take place in Austin in June. The company added that output will start by midyear for an "affordable" EV, with executives later saying that the cheaper EV line will "resemble" the Model Y or 3. Several reports earlier stated that the first cheap EV would be a stripped-down Model Y.
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Regarding the new affordable model, the Tesla exec team said the models that will come out in the coming months "will be built on our lines and will resemble, in form and shape, the cars we currently make, but the key is that they'll be affordable."
This suggests that there will not be a "new" vehicle line and that future cars will be similar to the current Model Y or Model 3 vehicles.
Multiple reports have stated that the first cheaper EV would essentially be a stripped-down Model Y.
Analysts Slash Tesla Profit Forecasts
A day before Tesla announced first-quarter earnings, analyst consensus was for the EV giant to see about 7% profit growth in 2025, even with disastrous Q1 vehicle deliveries already reported amid apparent "brand damage" associated with Musk's close work with the Trump White House.
That all changed late on April 22 after Tesla announced first-quarter earnings. While the stock market generally cheered Musk and the Tesla team for their performance on the Q1 earnings call, analysts hastily began slashing full-year earnings expectations.
The day before Tesla earnings, the consensus view was for 2025 EPS to grow 6.6% to $2.58. As of June 4, the consensus projection has dropped 24% to $1.97, according to FactSet. Analyst consensus is also down more than 40% since the end of 2024.
The current expectation would mark a nearly 19% decline vs. the originally reported $2.42 in 2024. If this view holds true, it would be Tesla's third consecutive annual profit decline. Analysts surmise the profit decrease could be due to general economic difficulties for the auto industry, brand damage associated with Musk's work with Trump and the decision by Tesla to release its "new affordable" vehicles as scaled-down cheaper versions of the Model Y and/or Model 3.
The move to not come out with a new model line could mean customers do not buy the more expensive Model Y or Model 3 variants and simply purchase the cheaper variants.
Tesla Changes Q4 Earnings
Meanwhile, Tesla also revised lower its Q4 2024 earnings to 60 cents per share, down 13 cents from the originally reported 73 cents per share, without an explanation. The lower Q4 EPS means 2024 earnings came in at $2.29 per share.
Using that number, the current 2025 EPS analyst consensus represents a 14% decrease.
In Q4, Tesla's net income was boosted by a recent change in how companies account for holdings of digital currencies. This policy change resulted in a net income increase of $600 million.
For Q1, Tesla reported its net income changed unfavorably by $562 million due to a $125 million mark-to-market loss on its bitcoin digital assets, according to the company's 10Q federal filing.
Tesla announced late on Jan. 29 worse-than-expected fourth-quarter earnings and revenue, with Q4 EPS of 73 cents, growing 3% compared to Q4 2023, and revenue increasing 2% to $25.71 billion. After a surprise gain in Q3, Tesla's total gross margins fell 138 basis points to 16.3%. Auto gross margins excluding regulatory tax credits tumbled to 13.6% vs. 15.7% expected, per FactSet.
"I think we will make progress on addressing that constraint and then things are really going to go ballistic next year and then really ballistic in 2027 and 2028," Musk said.
"The reality of autonomy is upon us," Musk added, touting the outlook for the value add of FSD.
Musk also conceded that Tesla EVs with Hardware 3.0 might not be able to achieve true self-driving.
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Tesla And Musk Brand Damage
A recent YouGov and Yahoo News survey of 1,677 U.S. adults between March 20-24 showed that 67% of respondents would not consider buying or leasing a Tesla vehicle. Thirty-seven percent of those polled Elon Musk was the "whole/part of the reason why."
Meanwhile, a CNBC All-America Economic survey, released on April 22, found that more than than 47% of the U.S. public have a negative view of Tesla. CNBC reported that about 27% are positive on Tesla, while 24% are neutral.
About a third of the public have a positive view of General Motors with 51% neutral and 10% negative.
Specifically regarding Musk, Half of those surveyed view Musk negatively. About 36% see him positively and 16% are neutral. Among Democrats, Musk's net approval (positive minus negative) is -82 and -49 for independents. GOP respondents are +56, according to the CNBC All-America Economic survey.
The survey polled 1,000 people from April 9 through April 13.
The company faces similar brand destruction in Europe, where Musk has weighed in on the Ukraine war, German elections and much more.
Tesla Stock: The Robotaxi Event
Musk set sky-high expectations for the "We Robot" event. But after showing off a CyberCab and Robovan late on Oct. 10 2024, the market seemed unimpressed with Musk as he once more claimed full autonomous driving will come "next year" but did not offer any details or updates of an "affordable" EV.
The event was high on theatrics with Musk riding the two-seat CyberCab, with butterfly doors and no steering wheel, briefly to the stage to give his remarks. Dancing Optimus robots were paraded out with the Tesla humanoids serving attendees drinks. However, the consensus among analysts was that while the event was high on pomp and circumstance, it underdelivered on details.
Musk did say he expects the CyberCab price tag will be below $30,000, with production starting "before 2027." The Tesla chief also showed off the latest Optimus robot. He expects that the cost could be $25,000-$30,000 when produced at scale.
"That's it? Disappointing lack of detail," Morgan Stanley's Jonas proclaimed in his investor note following the event. Wells Fargo analysts echoed that sentiment, writing that Tesla's robotaxi event was mostly "razzle-dazzle" with "little substance."
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Tesla EVs In Regulators' Sights
The National Highway Traffic Safety Administration in a letter made public in early May asked Tesla about its plan to launch its robotaxi service. The NHTSA wrote it is looking for more information "to assess the ability of Tesla's system to react appropriately to reduced roadway visibility conditions."
The regulatory body also noted it has an ongoing investigation into Tesla Full-Self Driving collisions in reduced roadway visibility conditions.
The NHTSA gave Tesla a June 19 deadline to respond to its inquiry.
Meanwhile, the NHTSA announced in January it opened an investigation into Tesla, citing "Actually Smart Summon sessions resulting in crashes during the session, including where the operator does not have enough time to react due to vehicle proximity or line of sight."
Federal regulators wrote they have received one complaint alleging that an Actually Smart Summon session resulted in a crash and has reviewed at least three media reports of apparently similar crashes. All four incidents involve Tesla vehicles operating in Actually Smart Summon failing to detect posts or parked vehicles, resulting in a crash, according to NHTSA.
Tesla also announced on Mar. 20 the recall of 46,096 Cybertruck vehicles to fix an exterior panel that could detach while driving, according to U.S. National Highway Traffic Safety Administration. Tesla sold 38,965 Cybertrucks in 2024, according to Cox Automotive estimates.
Is Tesla Stock A Buy?
Almost single-handedly, Elon Musk has turned the auto industry on its head. He has essentially forced it to get aboard the electric-vehicle train. Tesla has been a monster stock over much of its history, especially during its stratospheric run from mid-2019 to late 2021.
However, Tesla stock on Thursday plunged through several moving averages, according to analysis of MarketSurge charts. Shares have now erased a strong move from an aggressive entry of 294.86 cleared on May 9.
The upcoming Tesla robotaxi launch is a risk event that could trigger huge moves, and not necessarily on day one.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote late Thursday that TSLA is "under major pressure" as investors fear that this Musk/Trump battle will stop their friendship and change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump administration."
"This feud does not change our bullish view of Tesla and the autonomous view but clearly does put a fly in the ointment of the Trump regulatory framework going forward," Ives added, referring to the long-held belief that Trump would clear the regulatory path for autonomous vehicles.
Cathie Wood's ARK Invest has also repeatedly trimmed Tesla holdings in recent days. Wood sold Tesla on Monday, after making similar moves three times last week, selling a combined nearly 50,000 shares.
Meanwhile, Milan Kovac, the head of engineering for Tesla's Optimus humanoid robot program, is reportedly leaving the company, according to a Bloomberg report late Friday.
Kovac reportedly told other staff members Friday he is leaving Tesla effectively immediately. Bloomberg reports that Tesla autopilot leader Ashok Elluswamy will take over the Optimus robot lead. Kovac has only been in charge of the Optimus program since October 2024.
Tesla stock ended the week down 14.8% and has now declined about 27% for the year, despite surging on robotaxi bets following the April 22 Q1 conference call. The stock is also 39.6% below its all-time high of 488.54.
Tesla stock has a 21-day average true range of 5.30%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The S&P 500 and Nasdaq are now in a power trend. Investors can buy stocks with ATRs of up to 8%, though they should be wary of being too concentrated in high-octane names.
Tesla stock has a 70 Composite Rating out of a best-possible 99. The stock also has an 85 Relative Strength Rating and a 59 EPS Rating.
See More Tesla Stock News And Analysis
Please follow Kit Norton on X @KitNorton for more coverage.
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