Tesla Stock Rebounds After Worst Day in Five Years as Musk Pledges to Double U.S. Production
Tesla (TSLA) stock surged on Tuesday following a steep decline the previous day, marking its worst performance in nearly five years. The rebound came after CEO Elon Musk announced plans to double U.S. vehicle production, a move he attributed to supportive policies from the Trump administration.
Musk Commits to Expanding U.S. Manufacturing
Speaking at a White House event alongside President Donald Trump, Musk confirmed Tesla’s ambitious expansion plan:
“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.”
Following Musk’s remarks, Tesla shares hit session highs, closing with a 3.8% gain.
Trump, who praised Tesla as a “great company,” expressed his intent to personally purchase a Tesla EV. The White House emphasized that Trump’s tariff policies are designed to strengthen U.S. manufacturing. Similar effects are already being seen in the industry, with Honda reportedly planning to manufacture its next-generation Civic in the U.S. to navigate recent trade policies.
Wall Street’s Confidence Boosts Tesla Stock
Adding to Tesla’s momentum, Morgan Stanley analyst Adam Jonas, one of the company’s most vocal supporters on Wall Street, encouraged investors to buy the dip.
“Tesla shares have fallen 50% from their December 17th highs and 45% year-to-date due to poor sales data, negative brand sentiment, and broader market de-grossing. We view this pullback as a buying opportunity for an AI-driven compounder,” Jonas stated in a note to clients.
Market Sentiment and Future Outlook
Jonas noted that Tesla’s stock movement significantly influences public sentiment about the company. When Tesla shares rise, the narrative centers around its advancements in artificial intelligence (AI) and autonomous technology. Conversely, declining stock prices shift the focus to falling sales, brand challenges, and distractions tied to Musk’s external ventures.
Looking ahead, Jonas expects Tesla’s stock to remain volatile, projecting a bear-case scenario at $200 per share and a bull-case scenario at $800 this year. He pointed to several potential growth catalysts in 2025, including:
- The unveiling of Tesla’s robotaxi testing in Austin
- New federal regulations for autonomous vehicles
- Progress on Tesla’s humanoid robot, Optimus
- Key technological advancements in Tesla’s auto division
Morgan Stanley maintains Tesla as a “Top Pick” stock, assigning it a price target of $430.
Musk’s Government Role Sparks Controversy
Amid ongoing political discussions, Trump defended Tesla and Musk against calls for a boycott. The president claimed left-wing activists were orchestrating protests at Tesla showrooms to undermine the company.
Meanwhile, Musk’s leadership has come under scrutiny as he juggles responsibilities at Tesla, SpaceX, xAI, and his controversial government role overseeing the DOGE initiative.
In an interview with Fox Business, Musk admitted to facing difficulties in managing his business empire while fulfilling his government obligations:
“It is tough sledding, but I think we’re doing the right thing.”
Tesla shares have plummeted over 50% since reaching their all-time high of $479.86 on December 17, 2024. While challenges remain, Musk’s production expansion plans and Wall Street’s bullish outlook could help shape Tesla’s trajectory in the months ahead.
