Tesla stock rose early Wednesday after California late Tuesday gave the EV giant approval to use its electric cars to drive its own employees. The move is seen by bulls as a step toward a robotaxi launch.
Chief Executive Elon Musk's company received the green light on Tuesday from the California Public Utilities Commission for a transportation charter-party carrier permit. That gives Tesla the ability to transport employees in company-owned vehicles before potentially later transporting members of the public.
While technically a step toward the Tesla robotaxi, the permit is related to taxis, not fully autonomous vehicles. Musk has said that unsupervised full self-driving, or FSD, will come as a paid service to Austin, Texas, in June. Musk has also claimed there will be robotaxi tests in many U.S. cities by year end.
Tesla stock rose 4.7% to 235.86 during Wednesday's stock market action. On Wednesday, Baird analysts announced they are maintaining a "bearish fresh pick" designation on TSLA after a tour of Tesla's battery manufacturing line at the Texas gigafactory and a meeting with the investor relations.
The firm lowered delivery estimates for both Q1 and Q2 and adjusted the firm's full-year delivery mix to reflect the impacts of downtime for the Model Y Launch series. Baird has an outperform rating and 370 price target on the stock.
Cantor Fitzgerald analyst Andres Sheppard also on Wednesday upgraded Tesla to overweight from neutral with an unchanged price target of 425. The analyst visited Tesla's Cortex AI data centers and the factory's production lines. Sheppard wrote that with Tesla shares down about 45% year-to-date, there is an "an attractive entry point" for investors with greater than 12-month investment horizon and who are comfortable with volatility.
TSLA fell 5.3% to 225.31 on Tuesday amid various Tesla China news pointing to lackluster demand for the refreshed Model Y. More analysts are also slashing price targets and estimates for deliveries and earnings, citing brand destruction in the U.S. and Europe.
Meanwhile, Nvidia announced Tuesday that it's partnering with General Motors to develop its "future" self-driving car fleet. That could be a blow to some analysts' expectations that Tesla will license out its FSD technology to other automakers.
"The time for autonomous vehicles has arrived," Nvidia CEO Jensen Huang said Tuesday at the GTC conference.
Tesla Stock Performance
Tesla stock enters Wednesday down more than 23% in March.
The EV giant has fallen 44.2% so far in 2025, the worst performer in the S&P 500 this year. Shares have fallen for eight straight weeks.
Investors are worried that Musk's political work with President Donald Trump and comments are causing Tesla brand "destruction," hitting sales significantly. RBC Capital slashed its TSLA price target Tuesday, citing weaker prospects for Tesla FSD, especially in China.
Meanwhile, analysts have been revising Q1 and full-year earnings estimates, according to FactSet. The current sharp consensus predicts first-quarter earnings down 2% to 44 cents per share. The sharp consensus view has dropped 14% since the end of January.
The company is also expected to see Q1 vehicle deliveries increase 9% to 422,000 as of Wednesday estimates, which have declined nearly 7% since Jan. 31. The most timely delivery estimates are around 358,000-378,000, which would be below Q1 2024's 386,810.
For the full year, sharp consensus pegs Tesla EPS increasing 6% to $2.57. However, the sharp consensus number has dropped more than 10% in recent months. For 2025, analysts predict Tesla vehicle deliveries to increase 10% to 1.97 million units, but with more recent forecasts targeting flat to lower sales for the year.
Tesla stock has a 21-day average true range of 6.87%. The ATR metric is available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
Tesla stock ranks eighth in the 35-stock IBD Auto Manufacturers industry group. The stock has a 46 Composite Rating out of a best-possible 99. Shares also have a 26 Relative Strength Rating and an 84 EPS Rating.
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