Tesla Stock Prediction 2025
My Tesla stock prediction 2025 may surprise you. But hear me out. Because the truth is, Tesla actually proved to be one of the biggest wins of my career.
Had you bought shares of Tesla when I recommended buying it right after I went public, you’d be sitting on a gain in excess of 20,000%. A one-time investment of $5,000 would now be worth more than $1 million.
I recommended folks buy shares of TSLA even prior to its IPO. This, despite so many of the Wall Street elite betting against the new electric car company. But I did the research. I interviewed Tesla employees, met with battery manufacturers and even flew to California just to test drive the company’s first offering, the Roadster.
To be fair, I was a huge fan of the technology and always had a bit of a fascination with electric cars. And for the first time, there was actually a visually appealing, highway-capable electric car that I believed would change the game. And it did.
Make no mistake: not only did Elon Musk create one of the most successful car companies in the world, but he single-handedly launched the transition from internal combustion to vehicle electrification. And while EVs still only represent a small number of cars on the road, the sector has grown rapidly since Tesla went public in 2010.
In 2010, there were around 12,500 electric cars on the road. Last year alone, total new EV sales worldwide clocked in at more than 17 million. By the end of this year, that number will rise to 20 million. And Tesla will certainly be a part of those sales. After all, Tesla has long dominated this space. But that is changing.
Tesla Stock Prediction 2025: It’s Complicated
Part of this is simply the result of more competition. Particularly from EV makers in China, which are now pumping out high-quality EVs and selling them at huge discounts compared to what you’ll find from U.S. and European automakers. And this includes Tesla.
Last year, the best-selling EV in China was the Tesla Model Y. Today, it’s an EV made by Chinese automaker, BYD (OTCBB: BYDDY). This is a stock I actually recommended in May, 2024. Since then, the stock has more than doubled. Tesla, on the other hand, is up only up around 34% since May, 2024. Not that such a gain should be trivialized. It’s still solid, and Tesla is still a solid company. The question is, will Tesla’s sizable global market share continue to be chipped away by China’s EV makers?
Indeed, it will be difficult for Tesla to return to the top spot it once held in China. There’s just too much competition. Tesla is also starting to lose market share in Europe, where the carmaker’s sales were down 44% in February.
Many have speculated that this is the result of Elon Musk’s support of the Trump administration as well as his support for a far-right political party in Germany. While it’s still too early to know for certain, it would be foolish to assume that his involvement in politics has not had an impact on the Tesla brand.
I would argue that this does have a lot to do with Tesla losing market share in California, though. As reported in Bloomberg, Tesla is no longer selling the majority of new electric cars registered in the Golden State. A state, by the way, that accounts for nearly a third of all zero-emission vehicle purchases in the U.S.
In all fairness, there were some manufacturing disruptions in Q1 that could’ve affected sales, but it doesn’t take a rocket scientist to see that there has been a real backlash against Tesla since Musk got involved with Trump. And the inconvenient truth here is that there aren’t enough Trump supporters going out and buying Teslas. At least not enough to make up for the loss in sales as a result of Musk’s involvement in the Trump administration.
I’m not saying this to be critical of Musk, by the way. It’s merely just an observation of truth that investors must face.
According to the California New Car Dealers Association, Tesla’s share of EV sales in California fell from 55.5% in Q1, 2024, to 43.9% in Q1, 2025. And while Tesla registrations fell, sales of all other EVs increased 35%. I think this will get worse before it can possibly get better. The blowback from the Trump/Musk friendship is unlikely to dissipate anytime soon.
This doesn’t mean Tesla will go gently into that good night. The company still makes some of the most impressive EVs in the global market. And I suspect that as Musk begins to distance himself from the Trump administration (at least in public), some of the animosity towards the brand will vanish.
As well, Tesla is best-positioned to navigate Trump’s trade war right now. After all, Tesla is the “most American” car brand, with its long-range Model Y and Model 4 containing nearly 90% total domestic content. Compare that to the most popular vehicle in the U.S. – the Ford F-150 – which contains just 60% total domestic content.
So yes, Tesla does have an advantage behind the backdrop of all these new trade restrictions.
Overall, it’s going to be a tough year for every automaker in the U.S. After all, trade wars and fears of recession don’t tend to motivate people to go out and buy new cars. But when the dust settles – and it eventually will – Tesla will still be one of the top EV sellers in the country. And despite a recent slowdown in sales, the transition from internal combustion to vehicle electrification is still well underway. And this virtually guarantees that Tesla will continue to own a sizable share of the American EV market. What that means for the stock is still hard to tell. But if we can avoid a major recession, Tesla should continue to trade above $200 a share.
Jeff
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