TSLA

Tesla stock is picking up steam, adding nearly 12% over the past 24 hours. A 4.6% gain on growing hopes before the EV maker's quarterly earnings and web call during the regular session on April 22, was followed by over 7% more in the afterhours and pre-market trading the next Wall Street morning, to touch $255 per share. However, this still leaves 22% headroom for a further highly likely upside move, even if we measure the potential by the modest standards of Reuters' average expert estimates of $311 only the day before, while targets in the $400+ range seem more realistic, even abandoning claims for re-testing historical peaks around $480, which were on the table before a general correction in tech assets.

The market crowd responded enthusiastically despite a nominal miss on both the top and bottom lines after electric car sales dropped as much as 20% QoQ vs the same period a year ago. Tesla's EPS (earnings per share) from January to March was $0.27 on revenue of $19.34 billion, while analyst pool "officially" anticipated EPS of $0.42 per share on revenue of $21.4 billion. The main point was that the numbers were substantially better than deep-end estimates, based on irrational fears.

Concerns around brand damage lessened when Tesla CEO Elon Musk commented on a web call that he would cut back his occupation in the so-called Department of Government Efficiency, or DOGE, as a close adviser to U.S. president Donald Trump. DOGE was designed "in addressing waste and fraud" to downsize the federal government but also caused a backlash to Musk's business interests sometimes, when Tesla cars encountered widespread vandalism at its showrooms, slowing normal sales. "If the ship of America goes down, we all go down with it, including Tesla and everyone else. So I think this is critical work... Those who were receiving the wasteful dollars and the fortunate dollars will try to attack me and [the] Doge team and anything associated with me... the protests that you’ll see out there, they’re very organized. They’re paid for...", Musk said, adding that his time with DOGE will "drop significantly" in the coming months. So, he is going to spend just a day or two per week on government matters "to make sure that the waste and fraud that we stop does not come roaring back" during the remainder of the president’s term, yet being more focused on Tesla "probably in next month, May". Starting next month, Musk would be "allocating far more of my time to Tesla", now that "the major work of establishing the Department of Government Efficiency is done". Many breathed a sigh of relief at these words, so that Tesla share price immediately began to move confidently upwards.

Tesla's founding father also verbally reassured the doubters: "At Tesla, we’ve gone through many crises over the years and actually been through many near death experiences... We’re probably on the ragged edge of death at least on maybe a dozen times. It’s been so many times. This is not one of those times. We’re not on the ragged edge of death. Not even close". Still, we would pay more attention to strategic announcement on product innovation and market expansion, like launching Tesla's Robotaxi in Austin, Texas, as early as in June, related to targeting millions of FSD (full self-driving) autonomous vehicles by the second half of 2025 "at scale at low cost" and 1 million Optimus humanoid robots annually by 2029. Tesla expects to have "thousands" of these Optimus robots working in Tesla factories by the end of 2025. Further localizing supply chains on the continent in which the car is built and would be sold, in both America, Europe, and Asia, is another top priority to remain the least affected car company with respect to tariffs. Musk will continue "to advocate for lower tariffs rather than higher tariffs", even though "this decision is fundamentally up to the elected representative of the people being the president of The United States".

Besides, Tesla's energy business is doing well, with the Megapack system buffering the energy at night to enable utility companies, which are buying the system to output far more total energy than would otherwise be the case. Tesla said many orders in the hopper for gigawatt and beyond batteries, but the exact number was not named, Musk only mentioned that the stationary energy storage business would scale ultimately "to terawatts per year".

In terms of robotaxis, the whole system should ultimately work in a way where a customer can pay rides fully autonomously with no one else in the car in one city, which later becomes a very scalable thing in other places. What is important, the "prosperity" of autonomous rides "move the financial needle in a significant way" is going to take effect in a material way "around the middle of next year", according to a web call transcript. That's probably why Musk also mentioned some sort of bumps and potholes of Tesla's road "immediately ahead of us", but keeping his gaze "to the bright shining, you know, sort of down on a hill". As for more precise growth figures, here's another helpful quote from Musk that sheds some light on the matter: "It’s difficult to predict the exact ramp sort of week by week and month by month, except that it will ramp up very quickly. So it’s gonna be like some basically an “S” curve where it’s very difficult to predict the intermediate slope of the s curve, but you kinda know where the s curve is gonna end up, which is the vast majority of the Tesla fleet being autonomous". You won’t find more specifics in the entire transcript.

In our view, this could mean in practice that the annual low for Tesla's stock price has probably passed, with higher peaks ahead: well above $300, but possibly below $400 for a while and bouts of increased volatility in this midterm journey as it happened many times with Tesla stock before. What Tesla has also managed to do over Q1 2025, and what can be called an outstanding achievement, which at the same time explains some decline in business for a while, was updating all its factories in the world for producing its best-selling and rather affordable car, Model Y. And this could also point to a fast increase in sales volumes soon. Well, "it’s never a dull moment these days", but "every day is gonna be exciting", according to Elon Musk, and it's hard to disagree with him at least in this matter.