Tesla (TSLA) had an eventful 2024, closing out the year with a strong performance thanks to CEO Elon Musk and some bold moves.
While the stock rose over 70% year-to-date, largely due to a post-election surge following the Trump victory, Tesla’s journey wasn’t entirely smooth. Here’s a recap of the year’s key moments and a glimpse into what might lie ahead for 2025.
The Robotaxi Gamble and Affordable EV Pivot
Tesla began 2024 with a warning about its growth, stating production would be “notably lower” in the coming year. This, combined with a disappointing delivery report in Q1, sent shares tumbling to their lowest point in almost a year. Compounding matters was growing competition in the Chinese EV market.
However, Musk saw an opportunity and made a bold move, announcing in August that Tesla would finally unveil its long-awaited robotaxi. Early on, there was concern that focusing on the robotaxi could sideline Tesla’s plans for a more affordable electric vehicle (EV). Analysts, like Emmanuel Rosner of Deutsche Bank, warned that the robotaxi project could overshadow the company’s efforts to create a lower-cost EV, which had been a major reason investors were excited about Tesla.
Then, in April, following the stock’s steep decline, Tesla reassured investors that it would accelerate plans for more affordable EVs while also continuing to develop the robotaxi. This helped calm concerns, although some still doubted Musk’s ability to juggle these ambitious projects.
Later in the year, in October, Tesla unveiled the Cybercab robotaxi, but the details were sparse, leaving many investors and analysts cautious. Despite this, some were still optimistic about the long-term potential of the robotaxi, with ARK Invest’s Tasha Keeney predicting that it could drive a significant portion of Tesla’s future value.
As for the affordable EV, Tesla confirmed in its Q3 earnings report that a cheaper model, the “Model Q,” would be launched in the first half of 2025, priced under $30,000 before subsidies. Investors are hopeful that the new EV will hit the market in early 2025 unless Musk delays it further.
Musk’s Compensation Drama
In addition to product development, Musk’s leadership was a hot topic throughout 2024. In January, Musk made headlines when he announced on his X platform that he felt uncomfortable growing Tesla into a leader in AI and robotics without having 25% voting control in the company. This statement came after a Delaware judge invalidated his massive $56 billion pay package, which had been granted by Tesla’s board but was criticized as excessive by some shareholders.
Tesla’s shareholders were then asked to approve the company’s move to Texas and ratify Musk’s pay package, which became a contentious issue. In the end, shareholders backed Musk’s pay deal, but the controversy continued, with some analysts warning that Musk’s focus on other ventures could harm Tesla’s future prospects.
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However, the saga didn’t end there. In December, another Delaware judge ruled the pay package invalid once again, sending the issue into 2025, with a potential Supreme Court appeal on the horizon.
Musk’s Political Alignment with Trump
Musk’s alignment with President-elect Donald Trump also became a notable factor for Tesla’s stock performance. Following Trump’s election, Tesla’s stock surged by 15% in a single day, and continued to rise throughout November and December. Investors believed that Trump’s administration could be more favorable to Tesla’s ambitions, particularly in the areas of self-driving technology and robotaxi development.
The stock’s upward trajectory was also supported by expectations that Trump’s policies would expedite the approval of self-driving initiatives, including full self-driving and robotaxi programs. Wedbush analyst Dan Ives raised his price target for Tesla to $515, up from $400, citing the potential for AI and autonomous vehicle opportunities under a Trump administration.
Ives also predicted that Tesla’s market cap could hit $2 trillion by the end of 2025, driven by growing demand in China and the company’s continued push into autonomous vehicles. If all goes as planned, some analysts foresee Tesla’s stock reaching as high as $650 per share in 2025.
What to Expect in 2025
Looking ahead to 2025, Tesla is set to launch its affordable Model Q, which could be a game-changer for the EV market. Meanwhile, the robotaxi and AI-driven projects remain key to the company’s future growth. Despite ongoing controversies surrounding Musk’s pay and political ties, Tesla’s long-term outlook remains strong, with analysts forecasting significant gains if the company can successfully execute its ambitious plans.
In summary, Tesla’s 2024 was marked by bold moves, significant challenges, and a fluctuating stock price, but if the company can keep up with its promises, 2025 could be a year of even greater success.