Tesla’s stock is soaring back in 2025 after a rough start to the year. Shares of the electric vehicle (EV) giant have surged 80%, completely erasing earlier losses.
The dramatic rebound comes after Tesla’s board gave Elon Musk a chance to become the world’s first trillionaire, Musk then made a bold show of confidence by purchasing $1 billion worth of Tesla stock, sending a strong signal to investors about the company’s future.
This move has reignited bullish sentiment on Wall Street and sparked renewed optimism around Tesla’s growth prospects in the EV and AI-driven energy sectors.
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The news lifted shares of Tesla (TSLA) 7% at the market open Monday. While it didn’t sustain those early gains, it did finish the day up nearly 4%. That was enough to wipe out the remaining losses for Tesla shares for the year, which at one point were down 42% from the end of 2024.
Commenting on the company’s growth tracjectory,
Dan Ives, tech analyst with Wedbush Securities and one of the bigger fans of Tesla on Wall Street said, “It’s a huge vote of confidence from Musk and the bulls love seeing this. It sends a positive signal after a very tumultuous year for Musk and Tesla shareholders.”
Recall that as Musk became active in running the Trump administration’s Department of Government Efficiency, the company started facing backlash from those who opposed Trump and his agenda. His EV company Tesla posted its largest sales drops in history in the first and second quarter, and profits plunged along with it.
Beyond the political backlash that impacted sales, the company also faced faced increased competition from the EV offerings of other automakers, particularly in China.
Displeased with the company’s downward trajectory, Tesla’s board, in its proxy statement spoke of the importance of keeping Musk focused on Tesla going forward.
They pointed out his involvement as CEO of several other companies, including rocket company SpaceX and artificial intelligence company xAI, which owns the social media platform X, which demands his attention. In addition to his many business interests, Musk remains active in politics, despite his falling out with Trump. He has announced plans to form a third political party, but details remain murky.
To ensure full commitment, Musk has consistently demanded a bigger stake and increased voting power at Tesla, having said previously that he would prefer to build AI and Robotuce products outside of Tesla if he cannot get 25% voting power. The board wants Musk focused on four things: cars, Tesla’s full self-driving software, robo-taxis, and AI-trained robots.
The recent package “represents a critical next step to keep Musk as CEO at least until 2030,” wrote Wedbush analyst Dan Ives in a report Friday. “Tesla is heading into one of the most important stages of its growth cycle with the autonomous and robotics future now on the doorstep.”
Musk Monday’s stock purchase brought an additional 2.6 million Tesla shares into his portfolio. But it barely increased his stake in the company, his holdings of Tesla shares rose by less than 1%.
This turnaround comes after a turbulent first half of the year, where Tesla grappled with intensifying competition from Chinese rivals like BYD and a broader slowdown in global EV sales. Analysts had initially forecasted a challenging 2025, with earnings projections dipping nearly 30% due to margin pressures and supply-chain disruptions, as noted in reports from Yahoo Finance.
Yet, the company’s focus on innovation, particularly in full self-driving technology and the Optimus robot project, has reignited investor enthusiasm.
Tesla’s third-quarter delivery volumes are expected to exceed forecasts, potentially marking a “bottom out and rebound” as suggested in analysis from LongPort. The company’s energy storage business also hit record highs, deploying over 11 GWh in the prior quarter, bolstering revenue diversification away from pure auto sales.
Future Outlook
Tesla’s 2025 recovery underscores its ability to navigate volatility through innovation, but sustaining this momentum will require executing on ambitious projects like unsupervised autonomy and next-gen vehicles.
As shares approach break-even for the year, industry insiders are watching closely for signs of whether this rally marks a new era or a temporary surge.