To The Moon

$Tesla Motors(TSLA)$ experienced a significant decline in its European market presence, with sales plummeting 49% year-over-year in April. The drop to 7,261 vehicles sold contrasts sharply with the broader EV market's 34.1% growth. This downturn is attributed to increased competition and reputational challenges linked to CEO Elon Musk's political activities.

S&P 500 Sector and Stock Analysis

Consumer discretionary, information technology, and communication services sectors led market gains. All 11 S&P 500 sectors increased, with utilities and energy sectors seeing the smallest gains at 0.8% each.

Tesla is one of the largest contributors to the 3.04% gains by consumer discretionary sector.

Why Tesla Stock Price Continued Upside Or At Least Shown Resilience

While news of a significant 49% year-over-year plummet in European sales for April 2025 is certainly negative, several factors can explain why the stock price might have continued its upside or at least shown resilience:

Forward-Looking Market (and Low Expectations): The stock market is forward-looking. While the April European sales data is poor, it's likely that much of this weakness was already anticipated or "priced in" by investors, especially after Tesla's disappointing Q1 2025 global delivery numbers. When bad news is already expected, its impact on the stock can be mitigated. In fact, if the market had priced in even worse European performance, the actual 49% drop might have been seen as "not as bad as feared."

Broader Market Optimism: The general market sentiment plays a huge role. If the overall stock market (e.g., S&P 500, Nasdaq) is experiencing a broader rally due to other macroeconomic factors (like positive economic data, interest rate expectations, or even unrelated geopolitical news like a tariff delay on EU imports, as noted in one search result), a strong tide can lift all boats, including Tesla.

Focus on Future Catalysts (Robotaxi, AI, Optimus): Tesla's valuation often hinges less on current vehicle sales and more on its long-term, ambitious projects.

Robotaxi: A major catalyst that has generated significant buzz and a rally in the stock recently is the upcoming robotaxi service. Elon Musk has been emphasizing the focus on autonomous driving and the potential for a robotaxi network to revolutionize mobility. The market is assigning a significant portion of Tesla's valuation to this future revenue stream, even if its launch date or profitability timeline is uncertain.

AI and Optimus Robot: Tesla is increasingly seen by some as an AI and robotics company, not just an automaker. Progress on its AI capabilities (like Full Self-Driving) and the development of the Optimus humanoid robot are viewed as potentially massive long-term opportunities. Investors might be betting on these future technologies rather than current vehicle sales.

Musk's Re-focus: Elon Musk's recent statements about "spending 24/7 at work" and being "super focused" on Tesla (and his other companies' new technologies) can reassure investors who were concerned about his divided attention.

Short Covering/Technical Factors: A significant portion of Tesla's stock is often held short (investors betting the price will fall). When there's any positive news or a broader market rally, these short sellers might be forced to buy back shares to cover their positions, which can artificially drive up the stock price in the short term, regardless of underlying fundamentals.

Perceived Bottoming Out: After a period of significant decline earlier in the year, some investors might view Tesla's stock as having "bottomed out." This sentiment can lead to buying activity even on mixed news, as investors look to get in before a more sustained recovery.

Diversified Revenue Streams (Long-term view): While car sales are a major part of the business, Tesla also has its energy division (solar, storage) and is pushing for FSD subscriptions. While not yet as dominant, the long-term potential for these diversified revenue streams could be part of the investment thesis.

Comparison to Competitors / Price Cuts: While Chinese EV brands like BYD are gaining traction in Europe, Tesla has also been aggressive with price cuts globally. Some investors might view this as a necessary strategic move to maintain market share in a competitive environment, even if it impacts near-term margins. The fact that BYD's stock has plunged recently due to price cuts could also make Tesla look relatively more appealing to some.

Based on the latest Chinese EV insurance registrations, Tesla (NASDAQ: TSLA) had 11,000 insurance registrations in China last week, down 1.17 percent from 11,130 the previous week.

Weekly MACD Crossover Recently Signal Continued Momentum

The weekly chart does support another big move into a bull flag into the expansion, as we can the weekly RSI momentum is still going strong positively, and we got a beautiful crossover of MACD a few weeks back.

The Tesla bulls are looking to push this one higher with a new weekly higher lows which is set around 270, in the events if this is a failed attempt for breakout, then we might collapse into that level. But I would say that we have pretty lot of space looking for a higher low on the weekly time frame for anything above 270.

The bulls would continue to push for a weekly uptrend expansion, and we might see some pretty good new highs.

Summary

While Tesla's European sales figures are undoubtedly a negative signal about current demand and competitive pressures in a key market, the stock's performance is often driven by a complex interplay of forward-looking expectations, broader market sentiment, speculative bets on future technologies (like robotaxi and AI), and the perceived commitment of its charismatic CEO.

The market is essentially valuing Tesla based on its potential future rather than solely its current vehicle sales performance.

Appreciate if you could share your thoughts in the comment section whether you think Tesla would continue to push for new highs despite Europe negative news and a slight dip in China EV registration.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.