In April, Tesla (NASDAQ: TSLA | TSLA Price Prediction) shareholders were desperate. The stock dropped from $251 at the start of the year to $132 on April 22. EV car sales were in trouble in general. Tesla posted a first quarter in which deliveries were down year over year. Second-quarter deliveries were down again but beat market estimates. The second quarter delivery report has been among the things that have rescued the stock, so it is now up 1% this year, eliminating 100% of the 2024 drop. Where will Tesla's stock be in a year?
Several other factors were critical to the Tesla rebound. China EVs have been pushed out of the European and US markets because of high tariffs. That means Tesla has a better chance of keeping its near 50% market share in America. Several car companies, led by Ford (NYSE: F), posted double-digit EV sales increases in 2024. However, the totals are still in the thousands, which shows how far they must go to come even close to the market leader.
CEO Elon Musk says Tesla continues to work on its next model, which could revolutionize the market by offering a sub $25,000 EV. He also promised to launch a robotaxi in August. It will need extremely advanced self-driving features, allowing it to break away from the traditional car business again.
What Tesla still needs to overcome, and which could keep the stock trading in its current range, is the drop in deliveries. The second-quarter number was 411,000, down 4%. Tesla has to show it can grow again, even in a slow EV sales market. It needs to upgrade its models, which have stayed the same in five years. It also needs to prove that a true self-driving feature will work.
Tesla shareholders also need to believe that the EV market will grow again. Potential buyers must overcome issues such as price, range, and the number of charging stations.
Can Tesla’s stock rally again sharply? That depends, almost certainly, on upcoming earnings and third-quarter deliveries.
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