To The Moon

Key Points

• Tesla’s China-made EV sales dropped 15% year-over-year in May 2025, contributing to a 4% stock price decline.

• The Robotaxi launch on June 12, 2025, in Austin could be a game-changer, but its initial scope is limited, and success is uncertain.

• Competition from Chinese EV makers and brand image issues linked to Elon Musk’s political activities are pressuring sales.

• Investors face a tough call: buy the dip if Robotaxi delivers, or exit if risks outweigh rewards.

• The outcome of the Robotaxi launch could significantly influence Tesla’s stock trajectory in June.

Why Are Tesla’s Sales Falling?

Tesla’s sales in China, a critical market, have been sliding for eight consecutive months. The 15% year-over-year drop in May 2025, with 61,662 vehicles sold, follows a pattern of declines driven by several factors:

• Fierce Competition: Chinese rivals like BYD, Nio, and Xpeng are gaining ground with affordable, innovative models. BYD’s Seagull, priced at 136,800 yuan, undercuts Tesla’s Model Y, which starts at 239,900 yuan after discounts.

• Aging Lineup: Tesla’s reliance on the Model 3 and Model Y, despite recent updates, is losing appeal as competitors roll out fresh designs.

• Brand Challenges: Musk’s political endorsements have reportedly turned off some buyers, particularly in Europe, where sales also dipped.

Can Robotaxi Save the Day?

The upcoming Robotaxi launch on June 12 in Austin, Texas, is Tesla’s big bet to turn the tide. The pilot program starts with just 10 self-driving vehicles in select safe areas, with plans to scale to 1,000 within months. Initially exclusive to Tesla employees, the service aims to go public by late June or early July. Musk has called it a “significant financial needle-mover” for 2026, but there are hurdles:

• Tech Risks: The service will rely on teleoperation—remote human oversight—to ensure safety, suggesting it’s not fully autonomous yet.

• Regulatory Scrutiny: The National Highway Traffic Safety Administration is probing Tesla’s Full Self-Driving tech, which could delay expansion.

• Competition: Waymo’s 250,000 weekly rides set a high bar, and Tesla’s camera-based approach must prove itself against lidar-heavy rivals.

A successful launch could boost Tesla’s stock by showcasing its autonomous driving prowess. A flop, however, could deepen investor skepticism.

Should You Buy, Sell, or Hold?

With Tesla’s stock down 4% after the May sales data, investors are at a crossroads:

• Buy: If you believe in Musk’s vision and Robotaxi’s potential, this dip could be a buying opportunity. Tesla’s history of rebounding from lows supports this case.

• Sell: Persistent sales declines and a risky Robotaxi rollout might signal more pain ahead, especially if competition intensifies.

• Hold: With only days until the launch, waiting for clarity might be the safest play. A strong debut could spark a rally; a stumble could trigger further drops.

What to Expect from Robotaxi

Expectations are sky-high, but the launch’s small scale tempers immediate impact. A smooth pilot with positive feedback could lift sentiment, while glitches or delays might fuel sell-offs. Long-term, a scalable Robotaxi network could redefine Tesla’s valuation, but short-term volatility is likely.

Tesla’s Tumble: A Deep Dive into the Numbers

Tesla’s stock took a 4% hit after May’s sales data revealed a 15% year-over-year decline in China-made EV deliveries, totaling 61,662 vehicles. This marks the eighth straight month of declines, a stark contrast to Tesla’s record-breaking China sales in 2024. The broader context is grim: global deliveries fell 13% in Q1 2025, and Europe saw similar struggles, partly due to Musk’s controversial political stances.

Here’s the recent sales trend for Tesla’s China-made EVs:

The volatility is clear—February’s plunge was exacerbated by Lunar New Year, while March saw a rebound. April and May, however, show persistent weakness, with May’s 5.5% month-over-month uptick offering little comfort against the year-over-year drop.

Why the Sales Slump?

Several forces are dragging Tesla down:

• Chinese Rivals: BYD, with a 34% market share, is dominating with budget models like the Seagull and Yuan Plus, priced far below Tesla’s offerings. Nio and Xpeng are also rolling out competitive smart EVs, eroding Tesla’s edge.

• Model Fatigue: Despite a revamped Model Y launched in late February, Tesla’s lineup feels stale compared to the flood of new models from rivals.

• Musk’s Political Fallout: Musk’s embrace of right-wing causes has hurt Tesla’s brand, especially in Europe, where buyers are reportedly turning away.

Price cuts, like the 10,000 yuan reduction on the Model Y, haven’t stemmed the tide, and Tesla’s premium pricing struggles against cheaper local options.

Robotaxi: The High-Stakes Bet

The Robotaxi launch on June 12 is Tesla’s chance to shift the narrative. The pilot, starting with 10 vehicles in Austin’s safest zones, will rely on Tesla’s Full Self-Driving (FSD) tech, supplemented by teleoperation for safety. Musk has promised a scale-up to 1,000 vehicles soon, with public access by late June or early July. The stakes are enormous:

• Revenue Potential: A successful Robotaxi network could generate billions annually, transforming Tesla from a carmaker to a tech platform.

• Tech Validation: Proving FSD’s reliability could silence critics and position Tesla ahead of Waymo and others.

• Risks: Regulatory probes, technical hiccups, or public skepticism could derail the launch. The NHTSA’s scrutiny of FSD is a looming threat.

Musk’s confidence is palpable—he’s called Robotaxi a cornerstone of Tesla’s future. But Tesla’s history of missed deadlines (the Robotaxi event was delayed from August to October last year) keeps skeptics vocal.

Investment Outlook: Risk vs. Reward

Tesla’s stock, trading at a premium despite recent dips, reflects its high-growth potential but also its risks. The 4% drop post-May sales data suggests investor jitters, but the Robotaxi launch could change the game. Here’s the breakdown:

• Bullish Case: A flawless Robotaxi debut could spark a rally, especially Bong>potentially pushing shares past their 2024 highs. Tesla’s resilience through past crises supports this view.

• Bearish Case: Ongoing sales declines, fierce competition, and a lackluster Robotaxi launch could drive shares lower. Analysts like Morgan Stanley remain cautious, citing valuation concerns.

• Neutral Stance: With the launch imminent, holding off for clarity might be wise. A strong performance could reignite momentum; a failure could deepen losses.

Expectations for Robotaxi

The Robotaxi pilot is small but symbolic. A glitch-free launch with positive employee feedback could boost confidence, while any mishaps—technical or regulatory—could fuel sell-offs. Long-term, a scalable network could add billions to Tesla’s valuation, but short-term volatility is almost certain.

The Verdict

Tesla’s EV sales slump is a red flag, but the Robotaxi launch could be a turning point. With just days until the debut, investors face a pivotal moment: buy into the dip, betting on Musk’s vision, or exit before potential disappointment. The outcome of June 12 will likely dictate Tesla’s near-term trajectory—choose your move carefully.

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