Tesla is navigating a complex landscape marked by declining global sales and rising competition, yet its stock has surged over $100 in the past seven weeks – buoyed, say some analysts, by optimism surrounding its autonomous-vehicle initiatives and investor hope that CEO Elon Musk’s political activity is fading.

Musk confirmed his exit from Washington, DC, in a post last week, saying his scheduled time as a special government employee is coming "to an end."

Musk recently told Bloomberg that he is going to do less political spending in the future, saying, "I think I've done enough," and acknowledged to the Ars Technica website that "I think I probably did spend a bit too much time on politics."

Tesla's U.S. sales have experienced a significant downturn. In Q1 2025, deliveries fell approximately 15% year-over-year, with an estimated 124,657 vehicles delivered in the U.S. and Canada combined. This decline is notable given the overall 10% growth in electric-vehicle sales during the same period.

And there is no evidence that the trend is reversing.

The European market has been particularly challenging for Tesla. Sales have plummeted across key countries, with April figures showing an 81% drop in Sweden and significant declines in the Netherlands, Portugal, Denmark and France. These declines persist despite the introduction of the updated Model Y, indicating deeper market challenges still connected to backlash against Musk’s political activity.

Tesla's sales in the European Union have plummeted in recent months, with a 49% drop in April compared to a year earlier. This decline occurred despite a strong overall growth in electric-vehicle sales, which increased 28%, leaving Tesla out of the top 10 BEV sellers in the EU.

In China, Tesla sold 58,459 vehicles in April, marking a 6% decrease from the previous year and a 25.8% drop from March. For the January-April period, total sales, including exports, were 231,213 vehicles, down 18.3% year-over-year.

Tesla has resorted to significant discounts to move its 2025 Model Y inventory. Discounted leases, subsidized financing and heavy discounting have not been part of the BEV maker’s history. But its website shows discounts on existing inventory of up to $8,700 on, for example, a $44,990 long-range RWD Model Y, plus other price reductions, such as military discounts, as well as the $7,500 federal tax credit, bringing the end price to about $30,000.

Despite these hurdles, Tesla's stock has risen approximately 20% in May, and 61% since April 8, closing at $357 on May 28. This surge is largely attributed to some analysts’ enthusiasm for Tesla's upcoming autonomous-vehicle and robotaxi initiatives, and Tesla’s AI businesses.

When Tesla shares were beaten down by boycotts and protests in February, March and April, a Tesla bull, Wedbush analyst Dan Ives, set a target price of $350. He cited the anticipated launch of a limited robotaxi service in Austin, TX, as a pivotal development, but Ives then lowered guidance to $315 in April when sales sunk. In May, he then reset his 12-month target price at $550.

These mad swings show the volatility and unpredictability of Tesla shares, especially with Musk’s historic lack of transparency regarding sales, delivery data and forward guidance. Tesla, for example, bundles production and delivery figures globally without breaking them down by region or model, leaving analysts to cobble together progress reports.

Tesla’s robotaxi service is expected to start with 10–20 autonomous Model Ys, potentially scaling up to 1,000 vehicles in the coming months.

Ives views this move as the beginning of a "golden age of autonomous" vehicles, estimating the AV market, including robotaxis, “could be worth $1 trillion.” He also notes that Tesla's advancements in AI and autonomous technologies position it alongside tech giants like Nvidia, Microsoft and Alphabet, and says Tesla's market capitalization could reach and unprecedented $2 trillion by the end of 2026.

Even Tesla-conservative industry analysts like Morgan Stanley analyst Adam Jonas believes the social pressure on Tesla may be waning with Musk’s diminished presence in the Trump White House, as well as being bullish on Tesla’s non-vehicle businesses. Jonas recently outlined an optimistic scenario where Tesla shares could reach $800 per share, assuming significant growth in robotaxi revenues, AI-driven ventures and robotics which will be the primary drivers of Tesla’s value.

“Every 1% of the U.S. labor force that can be captured by Tesla Optimus is worth approximately $100 per Tesla share,” writes Jonas.

Optimus is a humanoid robot developed by Tesla designed to handle tasks that are “dangerous, repetitive or boring” for humans, Musk has said. The robots are powered by Tesla’s in-house AI and Dojo supercomputing platform. Tesla’s first application for Optimus will be its own vehicle factories.

Longtime Tesla booster Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, however, is more interested in the vehicle sales outlook and unpredictability, and has become increasingly concerned over Musk's focus and the company's ability to meet ambitious targets. He warns that Tesla's stock could experience a significant downturn if these issues persist. In March, he publicly scolded Musk, saying, “I think he’s completely neglecting Tesla, and noted that Musk “is making a crucial mistake…trying to basically shun their EV sales business, which is really 95% of their value.”

With Musk not in the daily headlines for his role in the Trump Admin.’s quest to dramatically downsize and reshape the federal government, there is an expectation that consumers will lose their zest for boycotts and protests.

But even if vehicle sales continue to fall and drag down results, Tesla investors increasingly value the company not just as a BEV automaker but as an AI, energy (battery storage), and robotics platform.

Even though these segments contribute little to revenue today, the speculative future potential that has always been a huge part of Tesla’s climbing market valuation is blowing past demonstrations outside Tesla stores and focusing on future business-to-business growth largely unaffected by consumer sentiment.