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CEO Elon Musk is in a high-profile government spat, and Tesla (TSLA) is in the crosshairs.
Peter Navarro, a trade advisor to President Donald Trump, has said, “When it comes to tariffs and trade, we all understand in the White House - and the American people understand - that Elon is a car manufacturer, but he’s not a car manufacturer. He’s a car assembler.” Navarro was implying that Tesla simply “assembles” vehicles from auto parts made abroad.
Musk denies this claim, arguing that Tesla has the “most” American-made cars. But, Navarro’s comments echo a much longer-lasting debate over whether Tesla is a futuristic tech company or simply a carmaker.
Down by a considerable 32.6% on a YTD basis and trading close to 44% below its 52-week high, chances are that skeptics of Musk and his company agree with Navarro.
However, for long-term investors, the YTD decline could be a tremendous opportunity to accumulate shares of one of the most consequential companies of the 20th century. Here’s why.
Not Just a Car Assembler
Despite what Navarro said, Tesla is certainly not just a “car assembler.”
Tesla has vast mobility ambitions, with its upcoming Robotaxi service and Cybercab offering planned to start rolling out in June. Building on the over 3 billion autonomous miles already logged, as a callback to my previous piece — Tesla is inching closer to turning autonomous ride-hailing into a viable commercial business. As I have previously noted, this move strengthens Tesla’s positioning in a rapidly evolving mobility landscape and reinforces its push toward becoming the dominant force in AI-driven transport.
Adding momentum to its vehicle strategy is the expected full-time return of Musk to the CEO seat in May, following his departure from the Department of Government Efficiency, or DOGE. This timing aligns with two critical developments: The ramp-up of the redesigned Model Y and the planned release of a lower-cost Tesla model in the second half of 2025. These are both viewed as key pillars in Tesla’s medium-term growth story.
Meanwhile, Tesla’s robotics division could hold even greater disruptive potential. Optimus, the humanoid robot currently being trialed within Tesla’s factories, is already replacing humans in repetitive, labor-intensive roles. Musk has shared his belief that Optimus could eventually unlock as much as $10 trillion in revenue potential. The strategy hinges on achieving large-scale production —specifically, 1 million units annually — which could bring the unit cost below $20,000, thereby broadening its addressable market considerably. Commercial deployment is tentatively slated to begin in the second half of 2026.
Importantly, as the AI behind Optimus evolves, Tesla envisions the robot assuming more sophisticated responsibilities in vehicle and battery assembly — enhancing both safety and factory productivity. This not only deepens its integration into Tesla’s core manufacturing operations but may also lead to entirely new streams of monetization as the company leans further into advanced robotics and AI platforms.
Steady Financials
Despite falling slightly short of market expectations on both revenue and earnings in Q4, Tesla still posted year-over-year growth. The company’s revenue came in at $25.71 billion, a 2% increase compared to the same period last year, while earnings per share rose by 3% to $0.73 — just under the consensus forecast of $0.75.
Although a 13% annual decline in vehicle deliveries, totaling 336,681 in Q1 2025, raised concerns among some investors, other areas of the business reflected continued operational progress.
Tesla’s charging network saw a notable expansion during the quarter, with the number of stations rising by 17% year-over-year to 6,975 and total connectors increasing 19% to 65,495, highlighting the company’s ongoing infrastructure investments.
From a financial health perspective, Tesla’s operations continued to generate strong cash flow. Operating cash flow climbed to $4.8 billion from $4.4 billion in the year-ago period, though free cash flow slipped slightly to $2.03 billion.
The company also ended the quarter with a robust liquidity cushion, with $36.6 billion in cash and cash equivalents.
Analyst Opinions on TSLA Stock
Overall, analysts have attributed to Tesla stock a consensus rating of “Hold,” with an average target price of $319.31, suggesting potential upside of approximately 17% from its current levels. Among the 41 analysts covering the stock, 16 have issued a “Strong Buy” recommendation, three rate it as a “Moderate Buy,” 12 maintain a “Hold” stance, while 10 have given it a “Strong Sell” rating.
