Tesla stock rallied higher on Monday, extending a broader rebound that has unfolded despite a deteriorating backdrop for the company’s core automotive business.
The EV stock’s year-to-date gains continue to lag the S&P 500, but the stock’s resilience stands out given the mounting operational and market challenges Tesla faces across the US, Europe and China.
The latest boost followed CEO Elon Musk’s weekend remarks that driverless testing is accelerating.
“Testing is underway with no occupants in the car,” Musk said in an X post on Sunday, signalling that Tesla is intensifying efforts to bring fully autonomous vehicles to market.
Robotaxi push becomes central to investor narrative
Investors and analysts increasingly expect Tesla to scale up driverless testing rapidly as it prepares to launch its Cybercab robotaxi next year.
The company formally launched a robotaxi business in June and has indicated plans to begin commercial sales of humanoid robots as early as 2026.
Those ambitions have helped counterbalance concerns over sliding electric-vehicle sales.
Tesla uses AI computing not only to train its autonomous-driving systems but also to develop its robotics platform — capabilities that many investors now view as the company’s most significant long-term growth opportunities.
Musk reiterated last week that “safety monitors” will be removed from Tesla’s Austin, Texas, robotaxi fleet by the end of 2025.
He gave teams a three-week deadline to accelerate that transition, building on his Nov. 25 statement that the number of Model Y robotaxis deployed in December would increase.
International sales weakness deepens
Tesla’s operational challenges remain significant, particularly overseas.
The company sold 180,688 vehicles in Europe through October, a 30% decline from the same period in 2024.
Musk’s escalating public clashes with European political leaders have added headwinds, including his recent declaration that the “EU Commission should be disbanded,” which drew sharp attention amid Tesla’s shrinking regional market share.
Competitive pressure continues to intensify. China’s BYD sold 138,390 cars in Europe through October, surging 285% year over year.
In China — Tesla’s most important international market — the company’s sales through November were down about 6% from the prior year.
Tesla is now on track to record its first-ever annual sales decline in China and its second consecutive global decline.
Analysts on Tesla stock
Despite those setbacks, Tesla shares climbed as much as 4.9% on Monday, putting the company on pace to close at a fresh all-time high for the first time since December 2024.
The stock has more than doubled since its April lows, which coincided with a market selloff triggered by President Donald Trump’s tariff actions.
Wedbush analyst Dan Ives described 2026 as “a monster year ahead for Tesla and Musk as the autonomous and robotics chapter begins.”
He expects rapid expansion of robotaxi services across the US, supported by a developing federal regulatory framework, and anticipates production of the Cybercab to begin in the spring.
“We believe Tesla is taking major steps in advancing its AI Revolution path with autonomous [cars] and robotics front and centre,” Ives wrote.
He rates the stock a Buy and maintains one of Wall Street’s highest targets at $600 per share, a valuation that implies a market capitalisation approaching $2 trillion.
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