Tesla’s Robotaxi Bet Clashes With Political Turbulence—Can Musk Outmaneuver the Storm?

Elon’s empire faces dual realities: Regulatory headwinds slam the brakes while autonomous dreams hit the gas.

Wall Street’s favorite rollercoaster stock just added a new thrill—navigating Washington’s crosshairs while pitching a driverless future. Cynics whisper: ’Another distraction from delivery targets?’

TLDR

• Tesla stock needs to close above $349.98 Friday to achieve fifth consecutive weekly gain
• House passed legislation ending EV tax credits and adding annual fees for EV owners
• Senate voted to remove California’s air quality regulation rights, threatening Tesla’s zero-emission credit revenue
• CEO Elon Musk confirmed robotaxi service launch in Austin this June with human oversight
• Wedbush analyst Dan Ives raised price target to $500, predicting $2 trillion valuation within 18 months

Tesla stock climbed 1.4% in premarket trading Friday to $345.74, fighting to extend what could become its fifth straight weekly win. The electric vehicle Maker needs to finish above $349.98 to keep that streak alive.

Coming into Friday’s session, Tesla shares were down 2.6% for the week. That’s actually not terrible considering the political storm clouds gathering over the company.

The House passed President Trump’s “One Big Beautiful Bill” this week. The legislation includes provisions that WOULD end the EV purchase tax credit entirely. It also slaps EV owners with a small annual fee for the Highway Trust Fund.

But that wasn’t the worst news for Tesla. The Senate voted to strip California of its right to regulate air quality. This MOVE puts hundreds of millions in Tesla revenue at risk.

California Credits Under Fire

Tesla makes serious money selling zero-emission vehicle tax credits in California. If the state loses its regulatory power, those credits could disappear. GLJ Research analyst Gordon Johnson called the Senate vote “deeply negative for Tesla’s fundamentals.”

Johnson was surprised Tesla stock actually closed higher Thursday after the vote. California officials say they’ll fight the decision in court to keep state regulations intact.

The political pressure comes at a time when Tesla is trying to transform itself. CEO Elon Musk sat down with CNBC’s David Faber this week to talk robotaxis.

Robotaxi is premium point-to-point electric transport, accessible to everyone pic.twitter.com/oLykwaaTHm

— Tesla (@Tesla) October 11, 2024

Musk confirmed Tesla will launch its robotaxi service in Austin, Texas this June. But he warned the rollout will go slow with humans overseeing operations.

Analyst Gets Excited About Robotaxis

That human oversight didn’t dampen Wedbush analyst Dan Ives’ enthusiasm. The well-known tech bull published a research note Friday calling AI and autonomous driving worth at least $1 trillion for Tesla.

Ives raised his price target to $500 from $350. That suggests Tesla stock could jump 47% from Thursday’s closing price. He maintained his Outperform rating on the shares.

“The march to a $2 trillion valuation for TSLA over the next 12 to 18 months has now begun,” Ives wrote. He thinks full self-driving technology and the Cybercab rollout represent Tesla’s “golden goose.”

The analyst believes the TRUMP administration could help Tesla avoid federal regulatory hurdles. That could smooth the path for autonomous vehicle deployment.

Investor Sees Beyond Cars

Meanwhile, investor Bryn Talkington from Requisite Capital Management shared her bullish Tesla view on CNBC. She owns Tesla stock and drives a Tesla vehicle herself.

Talkington praised Tesla’s self-driving technology based on personal experience. She says her Tesla drives between her house and the airport without her touching the controls.

The investor believes Tesla will transform beyond just being an automaker. She pointed to the company’s humanoid robot program and manufacturing capabilities as proof.

Talkington noted that Tesla EV owners will eventually pay $99 per month for the self-driving technology. That recurring revenue stream could prove valuable long-term.

Skeptics Remain

Not everyone buys the robotaxi hype. Future Fund Active ETF cofounder Gary Black thinks human intervention will make it hard for Tesla to prove it’s solved autonomous driving.

Black worries this could disappoint investors expecting fully automated vehicles. The gradual rollout approach might not meet sky-high expectations.

Tesla investors appear willing to deal with those concerns after the robotaxi service actually launches. The company’s stock performance this week suggests confidence in the long-term vision despite near-term political challenges.

Musk confirmed the Austin robotaxi launch will happen in June with human oversight maintaining safety protocols.