Tesla shares climbed 5.7% on Tuesday, closing at $326.09, fueled by a viral video showing a Tesla vehicle operating without a driver in Austin, Texas.
This raised hopes that Tesla’s much-anticipated robo-taxi service is nearing launch. The gains pushed Tesla’s market value back above $1 trillion, outperforming broader market indexes that rose modestly.
The video, widely shared on social media, showed a Tesla driving itself with no one inside. Tesla did not comment officially, but CEO Elon Musk praised the company’s self-driving design on X (formerly Twitter).
Musk emphasized that Tesla’s robo-taxis will use unmodified cars available to the public and predicted that other automakers will eventually license Tesla’s self-driving technology. He said, “As Tesla robo-taxis become widespread and others’ solutions fail, they will naturally turn to us.”
This optimism helped Tesla’s stock ignore a warning from Wells Fargo analyst Colin Langan, who noted a decline in Tesla’s car deliveries. North American deliveries dropped 13% year-over-year through May, with European deliveries down 42% and Chinese deliveries down 22%.
Wall Street expects about 412,000 cars delivered in Q2, a 7% decline from last year, which could pressure profit margins. Langan rates Tesla stock as Sell with a $120 price target.
Tesla’s stock volatility also reflects recent political tensions. Shares fell 17% over two days last week after public clashes between Musk and former President Donald Trump.
On Tuesday, the stock rebounded 4.6% following Trump’s public well-wishes to Musk and his willingness to speak with the CEO. Musk had shown support for Trump’s stance on protests in Los Angeles and criticized California Governor Gavin Newsom, stirring political debate.
Despite a 24% drop year-to-date, Tesla shares have gained nearly 75% over the past 12 months. Investors now focus on Tesla’s autonomous vehicle ambitions, which many see as a potential new growth driver for the company.
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