Market Reacts Positively to Musk’s Commitment to Domestic Manufacturing
Tesla Inc. (NASDAQ: TSLA) experienced a much-needed rebound on Tuesday after suffering its worst single-day drop in five years. The stock closed 3.8% higher following a pivotal announcement by CEO Elon Musk, who pledged to double Tesla’s US vehicle production within the next two years.
Musk made this commitment during an afternoon event at the White House, where President Donald Trump expressed his support for Tesla, stating he would personally purchase a Tesla electric vehicle.
This announcement comes at a crucial time for Tesla, which has faced plunging sales, negative brand sentiment, and declining investor confidence. With Tesla shares down nearly 50% from their December 2024 highs, Wall Street analysts are now reassessing the company’s future trajectory.
Elon Musk’s White House Announcement: A Turning Point for Tesla?
During the White House event, Musk emphasized the importance of US-based manufacturing, attributing Tesla’s decision to pro-business policies under Trump’s administration.
“As a function of the great policies of President Trump and his administration, and as an act of faith in America, Tesla is going to double vehicle output in the United States within the next two years,” Musk stated.
The announcement boosted Tesla shares in late-day trading, reversing some of the recent heavy losses.
📈 Tesla stock closed up 3.8% on Tuesday after hitting a 52-week low on Monday.
📉 Tesla shares remain down 45% year-to-date, making it one of the worst-performing stocks in the tech-heavy Nasdaq index.
Trump’s Endorsement: Can It Revive Tesla’s Sales?
President Donald Trump, who has been advocating for stronger US manufacturing policies, described Tesla as a “great company” and expressed hope that his personal Tesla purchase would encourage more Americans to buy Tesla EVs.
“Tesla is an American success story, and I want to show confidence in Elon Musk and the work he’s doing,” Trump said.
Tesla has been battling sales declines in key markets:
📉 US sales down 11% year-over-year in January
📉 Europe sales down 45% in January
📉 China sales down 49% in February
While Tesla remains a dominant player in the EV space, the company has lost significant market share to rivals like BYD, Rivian, and Ford, as well as newly emerging Chinese EV makers.
Wall Street Analysts Turn Bullish: Morgan Stanley Calls Tesla a ‘Buying Opportunity’
Following Musk’s announcement, Morgan Stanley analyst Adam Jonas, one of Tesla’s most vocal Wall Street bulls, released a bullish note on the stock.
“Tesla shares have fallen 50% from the December highs (and down 45% year-to-date) on poor sales data, negative brand sentiment, and market de-grossing. We see the pullback as a buying opportunity for an AI-driven, autonomous technology leader,” Jonas wrote.
Morgan Stanley maintains a “Top Pick” rating on Tesla stock, with a $430 price target.
📉 Bear Case: $200 per share – If sales continue to decline and negative brand sentiment worsens.
📈 Bull Case: $800 per share – If Tesla successfully executes robotaxi development, AI expansion, and autonomous vehicle testing in 2025.
Jonas also highlighted several potential upside catalysts for Tesla in the coming months:
✅ Robotaxi testing launch in Austin
✅ New federal regulations supporting autonomous vehicles
✅ Updates on Optimus (Tesla’s humanoid robot project)
✅ Breakthroughs in AI and self-driving technology
Musk and Trump Push Back Against Tesla Boycott Movement
Tesla has faced growing backlash from consumer groups and political activists, with calls for boycotts intensifying in recent months. Musk, who has increasingly aligned himself with conservative politics, has become a polarizing figure, leading to protests at Tesla showrooms and a rise in Tesla owners selling their vehicles.
On Monday night, Trump directly addressed the Tesla boycott movement, claiming that “leftist agitators” were behind the protests and accusing them of “illegally and collusively” trying to undermine Tesla’s success.
🚨 Tesla’s brand perception has taken a hit, with recent surveys showing a decline in consumer trust.
🚨 Some existing Tesla owners have reportedly sold their vehicles over dissatisfaction with Musk’s political stances.
🚨 Sales in liberal-leaning states like California have weakened, compared to other EV brands like Rivian and Lucid Motors.
Musk, who is currently leading the White House’s controversial DOGE initiative, has seen his approval ratings among Americans drop, adding more uncertainty to Tesla’s market performance.
Key Takeaways: Can Tesla Regain Momentum?
Tesla’s stock rebound on Tuesday offers a glimmer of hope for investors, but major challenges remain.
🔹 The Bullish Case for Tesla
✅ Doubling US production could help Tesla offset declining international sales.
✅ Trump’s endorsement may boost sales among conservative consumers.
✅ Morgan Stanley’s bullish call suggests Tesla remains a long-term AI and autonomous technology leader.
🔹 The Bearish Case for Tesla
❌ Declining consumer sentiment may continue to hurt Tesla’s brand.
❌ Geopolitical tensions and Chinese competition could further weaken Tesla’s international growth.
❌ Tesla’s valuation remains volatile, with Wall Street divided on its future.
What’s Next for Tesla Stock?
As Tesla navigates 2025, all eyes will be on:
📅 Q1 earnings report – Will Tesla show signs of recovery?
📅 Robotaxi and AI developments – Can Tesla lead the autonomous vehicle race?
📅 US production expansion – Will Musk deliver on his promise to double manufacturing?
With Tesla’s stock still down nearly 50% from its highs, the company must demonstrate real progress to regain investor trust.
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