Key Takeaways

Tesla ( TSLA ) stock posted its best week since November’s presidential election as investors looked ahead to a future with looser autonomous car regulations and a more focused CEO.

Tesla shares soared nearly 10% on Friday after the Department of Transportation released an Automated Vehicle Framework intended to relax regulatory standards. The stock gained 18% this week, easily its best week this year and its biggest weekly gain since rising nearly 30% the week Donald Trump was re-elected .

Shares rose more than 4.5% on Tuesday amid a broad stock rally driven by optimism that the Trump administration will lower the steep tariff rates it imposed earlier this month. The stock's ascent picked up pace on Wednesday after Musk assured investors that, starting in May, he would spend less time leading President Trump’s Department of Government Efficiency, a position that investors worry has both distracted Musk and damaged Tesla’s brand .

Musk’s decision to re-focus on Tesla offset otherwise bleak quarterly results . The electric vehicle maker reported a 20% decline in automotive revenue, narrower margins, and a nearly 40% decline in adjusted earnings. It also declined to issue full-year guidance in light of the uncertainty surrounding tariffs and the overall economic outlook.

In the near term, the company faces a bumpy road, with tariffs expected to drive up manufacturing costs and, in the event of a recession, curb consumer spending. The company could also struggle to shake its association with President Trump, whose unpopularity abroad has contributed to a sharp drop in Tesla sales even as total EV sales have risen.

Analysts at several firms, including JPMorgan and Bank of America, lowered their estimates of Tesla’s full-year earnings after Tuesday’s disappointing numbers. At the same time, several left their price targets unchanged , reflecting Wall Street’s faith in Tesla’s ability to overcome near-term headwinds.

Musk has said Tesla’s value—he has forecast it will be “the most valuable company in the world and probably by a long shot ”—has as much, if not more, to do with its development of AI, autonomous driving, and robotics than the electric vehicles that account for the bulk of its revenue today. On Tuesday’s earnings call, Musk reiterated some ambitious timelines for the rollout of self-driving cars, robotaxis, and humanoid robots.

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