Tesla stock lower despite robotaxi test poised to start this week
Tesla (TSLA) stock slipped to start a big week for the automaker, with its highly anticipated robotaxi test set to begin on June 12 in Austin, Texas. Weakness in the stock comes after the fallout between CEO Elon Musk and President Trump, which does not show any signs of improving, at least for now.
Last week, Tesla stock tumbled nearly 15% and saw more than $150 billion in market cap erased after Musk slammed Trump's GOP-backed spending bill, prompting fiery responses from the president and raising concerns over the political risk now tied to the EV maker due to the actions of its chief exec.
While Trump allayed some concerns over his relationship with Musk on Friday, over the weekend the President told NBC News he had "no intention" of speaking to Musk in the near future.
Tesla shares were down as much as 4% in premarket trading but pared some losses in early trade.
Tesla received two analyst downgrades on Monday morning, citing the clash between Trump and Musk and the overhang it has created for the stock.
Argus cut its rating to Hold from Buy, with analyst Bill Selesky weighing in on the situation.
"We are concerned that the war of words between President Trump and Elon Musk, along with expiration of EV credits, could further weaken demand for new Teslas," he wrote, but added that the firm sees Tesla as attractive in the long term.
Read more: How to avoid Tesla car insurance sticker shock
Baird's Ben Kallo echoed similar sentiments on Monday as well, while downgrading Tesla stock to Neutral from Outperform.
"The recent incident between Musk and Trump exemplifies key-person risk associated with Musk's political activities," adding that the situation is adding "uncertainty to TSLA's outlook." Kallo added that Tesla and Musk's closeness with the government is a "double-edged sword," with the negative aspect of that borne out last week.
Both analysts see Tesla's upcoming robotaxi test and its results as long-term catalysts for the stock.
Tesla will begin its unsupervised robotaxi testing with around 10 to 20 robotaxis at first and the ability to ramp up if testing goes smoothly.
Tesla will use remote teleoperators in the event that a robotaxi has an incident or is stuck in a traffic situation, allowing human intervention when needed. While this is a welcome safety initiative, it may hinder ramping up Tesla's robotaxi fleet.
Wedbush's Dan Ives, one of Tesla's biggest bulls, pounded the table on the importance of the robotaxi test on Monday and why Tesla is still poised for further gains.
"Rome was not built in a day ... and neither will Tesla's autonomous and robotics strategic vision," Ives said, adding that there will be many setbacks on the way toward full autonomy and paid robotaxis.
Ives predicts Tesla will expand its testing to fleet to "20 to 25 cities" in the coming year, eventually making Tesla one of the best AI "pure plays" in the industry.
"Given its unmatched scale and scope globally we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the US and around the globe," Ives concluded.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.
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