Tesla shares climbed early Tuesday as tensions between CEO Elon Musk and President Donald Trump appeared to ease, helping to calm investor nerves following last week’s public spat.
The stock, which had dropped as low as $281.85 on Monday, closed the session at $308.58, marking a 4.6% gain.
The TSLA stock was up around 2.5% to trade at $316.10.
The late-day rally came after Trump publicly wished Musk well and indicated he was open to speaking with the Tesla chief.
Musk, in turn, appeared to align himself with the administration’s stance on the LA protests, replying to a post by Vice President JD Vance with American flag emojis and reposting Trump’s criticism of California Governor Gavin Newsom.
Tesla had shed 17% over two days last week amid a social media feud between Musk and Trump.
By Monday’s close, the stock had recovered roughly 60% of those losses.
Why Wall Street analyst is not very bullish on the TSLA stock
Wells Fargo analysts reaffirmed an Underweight rating and a $120 price target on Tesla shares in a note issued Tuesday, citing deteriorating fundamentals and sharply lower delivery trends across key markets.
The bank warned that Tesla is “on track for another poor quarter” in terms of deliveries, with global volumes in May reportedly trending 23% lower year-on-year.
For the second quarter so far, deliveries are down 21% compared to the same period last year, according to the firm’s estimates.
Wells Fargo highlighted that all three of Tesla’s core regions—North America, Europe, and China—are experiencing double-digit year-on-year declines in deliveries, with Europe facing the most severe downturn.
The note cited several headwinds, including waning demand for electric vehicles, intensifying competition, and reputational damage stemming from CEO Elon Musk’s political activity.
Europe was flagged as the “glaring concern,” with second-quarter-to-date deliveries down 42% year-on-year and year-to-date figures falling 37%.
China, another critical market, is also facing a year-on-year slump.
Wells Fargo noted that “aggressive financing promotions continue to act as price cuts,” which could further pressure margins.
Combined with falling delivery volumes and lower operating leverage, the firm believes this creates a meaningful downside risk to second-quarter profitability.
Despite investor focus shifting toward the anticipated June 12 unveiling of Tesla’s robotaxi initiative in Austin, Wells Fargo is skeptical that the event will be enough to offset the deteriorating fundamentals of the core automotive business.
“The debut is likely to be limited,” the note said, “and not enough to overshadow weak Q2 execution.”
Tesla’s China sales drop 30% in May
Tesla’s troubles in China deepened in May, with sales falling 30% year-on-year to 38,588 vehicles, according to newly released figures.
The sharp decline underscores the mounting pressure the US electric vehicle maker faces in its most competitive overseas market.
For the first five months of 2025, Tesla’s cumulative sales in China are down 7.82% compared to the same period last year.
The downturn has been largely driven by intensified pricing competition from domestic EV leaders such as BYD and Chery, both of which have ramped up discounting in recent months to gain share.
As a result, Tesla’s market presence has eroded significantly. The company’s share of China’s new energy vehicle (NEV) market fell to 3.78% in May, down from 6.87% a year ago.
In the pure battery electric vehicle (BEV) segment, Tesla’s share has more than halved to 6.36%, compared with 11.15% in May 2024.
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