"Tesla Inc. ( NASDAQ: TSLA) shares are nearly back to where they were on January 1. The stock is off only 1.9% from the start of 2025. They have surged 22% in the past three months. The rise from the lows of the period is improbable. Tesla sales have been weak in its three major markets, which are China, the United States, and the European Union. In China, it has more than a dozen local electric vehicle (EV) competitors. In Europe, sales are down by double-digit percentages this year. One reason is that there is controversy about Tesla chief Elon Musk's involvement with politics in the region."
"In the U.S. during the second quarter of the year, Tesla had an EV market share of 48%. While this put it on top of the market, there was a time when the number was close to 80%. Musk's relationship with Donald Trump, which was strong and then hit a wall, gets some of the blame for the decline. Tesla also faces competition, primarily from Ford, GM, and Hyundai/Kia. Based on Tesla sales so far this year, there is a chance that total global unit sales could fall sharply from 2024 to 2015. They were down very slightly from 2023 to 2024."
"Its stock price was strong in January and February. There was a belief that Musk's relationship with the president would get Tesla special treatment in the EV market. That optimism dissolved in March as the relationship fell apart. The company also posted poor first-quarter earnings. Tesla's share price is based on a battle between two perceptions. The first is that Tesla is just a car company and does not deserve its $1.28 trillion market cap, which makes it the world's 10th most valuable company. It also helps make Musk the richest man in the world at $419 billion. A new pay package for Musk could take that to $1 trillion in the next 10 years."
Tesla's share price returned close to its January level after a 22% three-month surge, leaving it only 1.9% down for 2025. Global vehicle sales have weakened across China, the United States, and the European Union amid intensified local competition and double-digit declines in Europe tied partly to political controversy. U.S. EV market share fell to 48% from near 80% previously, with competition from legacy automakers. Recent optimism linked to political relationships faded after March and weak first-quarter earnings. Market valuation reflects a debate between viewing Tesla as a traditional automaker versus a transformative technology company.
Read at 24/7 Wall St.
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