Tesla (TSLA) shares are rebounding sharply this week, lifted by renewed optimism over the company's self-driving taxi ambitions and a cooling public spat between CEO Elon Musk and President Donald Trump.
On Tuesday, Tesla stock rose nearly 6% to close at $326 — its third consecutive day of gains — as signs mounted that the long-awaited robotaxi launch in Austin is imminent.
Tesla is now officially listed as an autonomous vehicle operator by the city of Austin’s Transportation and Public Works Department. This regulatory green light comes just days ahead of the reported June 12 launch of the company's first driverless taxi service, a milestone investors hope will usher in a new era for the electric-vehicle pioneer.
The autonomous taxi service is expected to begin modestly, with a fleet of 10 to 20 Teslas operating on city streets, backed by human teleoperators ready to intervene remotely when necessary. The cautious start reflects Tesla’s effort to ensure safety amid broader concerns about autonomous driving reliability.
While the initial deployment may be small, the launch marks a major pivot toward Tesla’s long-term vision of AI-powered mobility. Investors increasingly view the robotaxi initiative as a potential game-changer — one that could offset the company’s struggles in its core EV business.
Wall Street Eyes Beyond Sluggish Sales
The market's renewed enthusiasm comes despite weak delivery figures across Tesla’s global markets. According to analyst data, North American sales are down 13% so far this year, European sales have plunged 42%, and Chinese deliveries fell 22%. Wells Fargo analyst Colin Langan warned that second-quarter deliveries could come in well below Wall Street’s already lowered expectations, predicting just over 412,000 units — a 7% year-over-year drop.
Nonetheless, shares have rallied strongly in recent sessions. On Monday, they closed up nearly 5% after a surprising show of détente between Musk and Trump. Just days after their feud sent Tesla shares tumbling, Trump offered conciliatory remarks, saying he’d be open to a conversation with Musk and adding that he planned to keep the Tesla Model S he bought earlier this year.
Those comments eased concerns that the company might face political or regulatory headwinds if it fell out of favor with the White House. Musk’s recent social media activity, including supportive reposts of Trump’s policy views, also seemed to help calm tensions.
Tesla stock has clawed back roughly 60% of its losses from last week’s feud-related drop and now trades about $25 below its early June high.
Valuation, Volatility, and Investor Sentiment
Despite the upbeat momentum, Tesla stock remains a lightning rod for debate on Wall Street. At around $1 trillion in market value, Tesla is worth about $700 billion more than Toyota — the world’s second-most-valuable automaker. That massive gap is driven largely by investor expectations for Tesla’s AI and autonomous driving initiatives, rather than its current vehicle sales or earnings.
Critics warn that Tesla’s valuation — roughly 140 times forward earnings — is hard to justify, especially as profit estimates for the next several years continue to fall. For comparison, the broader S&P 500 trades at about 22 times forward earnings. A rollback of EV subsidies, widely expected under a second Trump term, could deal a significant blow. According to JPMorgan’s Ryan Brinkman, government incentives account for more than half of Tesla’s core profits.
And yet, Tesla’s allure remains powerful. The company's posted job listings suggest it’s hiring aggressively for roles in teleoperation — a key component of its robotaxi and humanoid robot projects. Positions come with annual pay ranging from about $130,000 to over $330,000, along with benefits and stock awards.
Tesla also benefits from long-term brand strength and a loyal retail investor base. A $1,000 investment in Tesla five years ago would now be worth over $4,600 — even after recent volatility.
The Next Big Test Arrives
With the Musk-Trump feud seemingly in the rearview mirror and the Austin robotaxi launch days away, Tesla is once again at a pivotal moment. Investors appear willing to look past near-term sales challenges in favor of a much bigger prize: the successful deployment of autonomous, AI-powered transportation.
But expectations are high — and the risks equally so. From regulatory scrutiny to technological hurdles, Tesla must now prove that it can turn its bold vision into a viable, scalable business. For now, markets are betting it can.
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