So far, 2025 is a year to forget for Tesla (TSLA). The company is still worth close to $1 trillion, but the wheels are starting to wobble under the hood. Vehicle deliveries fell 13.5% in Q2, following a 13% drop in Q1. The EV market in the U.S. is cooling off, and TSLA is feeling it more than most. Profits fell 71% in Q1, and even that number was only possible because the company sold $595 million in regulatory credits. Without that, the core car business would be in the red. Despite all of the gloomy stats, TSLA stock had a good trading day yesterday, with the stock up roughly 5%.
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Tesla’s Mounting Problems
The last new model Tesla launched was the stainless steel Cybertruck, which was introduced five years ago, and hasn’t sold well. Meanwhile, plans for a $25,000 “Model 2” have been scrapped. CEO Elon Musk says a traditional budget EV would be “pointless.” Instead, he is focusing on a new version of that car called the Cybercab, a steering wheel–free robotaxi that has yet to launch at scale.
The company recently started a small robotaxi program in Austin, Texas, but it is years behind competitors like Alphabet’s (GOOG) Waymo. Musk says he expects hundreds of thousands of Teslas to be fully autonomous on U.S. roads by the end of 2026, but any production or rollout data do not yet support those numbers. So far, the highlight has been one Model Y autonomously delivering itself from the factory to a customer’s home.
The Optimus robot project is also part of the pitch. In Tesla’s latest impact report, images showed humanoid robots helping with chores in a solar-powered town. However, there is no clear timeline for when those robots will hit the market or what their business model will be.
Tesla’s Share Price Isn’t Backed by Its Auto Business
Musk insists investors should “lift [their] gaze to the bright shining citadel on the hill.” However, the engine powering that vision is a car business with declining sales, no affordable new models, and increased price-cutting to drive volume. Tesla’s leadership team is also in flux, with key executives like Omead Afshar and Milan Kovac stepping down this year.
Most analysts estimate the auto business is worth $50 to $100 per share. That is far below the current price of roughly $310. Tesla’s market cap continues to reflect investor faith in Musk’s ability to deliver future breakthroughs, not the company’s current financial performance.
Until robotaxis and Optimus start generating real revenue, Tesla’s valuation may remain a bet on belief rather than fundamentals. Investors will get the next set of answers on July 23, when the company reports Q2 earnings.
Is Tesla a Buy, Sell, or Hold?
Turning our attention to Wall Street, Tesla is considered a Hold based on 34 ratings. The average price target for TSLA stock is $285.73, implying a 9.48% downside potential.
