Has Tesla Restabilised After a Turbulent First Half of 2025?
For the first time in months, Tesla – the EV manufacturing giant headed up by Elon Musk – has recorded healthy financial growth.
Tesla's shares have roared back into positive territory for the year, after Musk purchased around US$1bn worth of his own company’s stock through a revocable trust on 12 September.
The purchase marked Musk's first open-market buy since February 2020, sending shares up 6.4% and lifting the firm roughly 4% above its starting position for the year.
The investment came as Tesla Chair Robyn Denholm discussed the merits of the company's unprecedented US$1tn compensation package for Musk, designed to incentivise his continued leadership over the next decade.
"Simply put, retaining and incentivising Elon is fundamental to Tesla achieving these goals and becoming the most valuable company in history," Tesla said in a shareholder letter.
A year of ups and downs
Tesla's recent recovery follows on from a turbulent first half of 2025.
It has been a year of turmoil for the world’s largest EV manufacturer, in which it has contended with mass boycotts, political endorsement, political backlash, scandals, lawsuits, technological failures and more.
Elon Musk has been right at the heart of much of this story, to the detriment and – now – to the eventual benefit of his company.
It all began in late 2024, when Tesla’s stock reached a historic peak at approximately US$1.5tn market cap, with these figures largely buoyed by Musk’s intimate involvement in US President Donald Trump’s election campaign.
However, Musk’s fervent support of Trump led many people who oppose the President to boycott Tesla’s products.
This movement reached its zenith after Musk made a controversial salute at a pro-Trump rally in January.
The consumer backlash included sporadic cases of arson and vandalism at Tesla stores and charging stations and the fallout contributed to a hefty 13% decline in all of the firm’s worldwide vehicle deliveries, resulting in two of Tesla’s worst quarters ever.
Vehicle sales slumped across major markets, with Cox Automotive estimating Tesla's share of the US electric vehicle market slipped below 40% in August.
But Tesla’s travails haven’t just centred around the unpredictable actions of its leader.
This year the firm had to pay compensation to the families of two people who were killed by a Tesla being driven with Autopilot mode engaged, representing a huge blow to the company’s self-driving technology.
Then, with Tesla looking to progress its fully autonomous taxi service, trials for its ‘robotaxis’ have been wildly erratic, leading to concern from civilians and investors.
But despite all of this, the company now appears to have attained a degree of stability, with its share prices returning to rude health.
Some economists still believe, however, that the company’s drop in sales will come back to harm Tesla’s value in the long run.
"There's an increasing disconnect between the stock price and what we see as the earnings estimate trajectory," says CFRA analyst Garrett Nelson.
When politics and business collide
While Tesla’s CEO stepped back from US politics in the springtime, he has continued to be outspoken on global issues.
One recent incident saw Musk make a remote appearance at a march in London, organised by the far-right agitator known as Tommy Robinson.
"You either fight back, or you die," Musk told rallygoers in a video that was livestreamed directly to the English capital. He also suggested that "violence is coming" to the UK.
A spokesman for UK Prime Minister Keir Starmer called Musk's language inflammatory and dangerous.
Robyn Denholm has since defended the CEO's political activities.
"What he does from a personal perspective, in terms of his political motivations, is up to him,” she says. “We're in a democracy, so everybody gets to voice their points of view."
With that said, the Tesla board has acknowledged seeking "assurances that Musk's involvement with the political sphere would wind down in a timely manner" during its compensation negotiations with Musk this week.
The trillion-dollar gamble
With Tesla seeking to guarantee Musk’s leadership for the next decade, the company is prepared to offer him what would be the largest executive pay plan in corporate history, potentially worth around US$1tn.
Receiving the full amount would, however, be dependent on Tesla reaching several ambitious milestones over the next 10 years.
The plan requires Tesla to reach a market cap of US$8.5tn, which is more than double Nvidia's current valuation as the world's most valuable company.
Other milestones include delivering 20 million vehicles, deploying one million robotaxis commercially and achieving US$400bn in adjusted earnings before interest, taxes, depreciation and amortisation.
Some experts regard this roadmap – and Musk’s ongoing commitment – with some scepticism, though.
"If you are a little more sceptical on Tesla's robotics endeavours, this is simply Elon buying shares to indicate his commitment to the company so that the recently proposed pay package gets approved," says Dmitry Shlyapnikov, an analyst at Horizon Investments.
The road ahead
Despite its recent tribulations and controversies, Tesla has shown signs of momentum with several of its new endeavours such as its new energy storage products.
This diversification has often benefitted Tesla in the past, and the company’s board will be banking on Musk’s appetite for innovation to see them into a new era of market supremacy.
In the near-term, though, the company will have to contend with some more issues, including the end of federal electric vehicle tax credits at the end of September, which may impact the company’s fourth-quarter sales.
The road ahead seems bumpier than ever, but those inside the company remain optimistic.
As for Musk – the world will see which road he takes when Tesla’s shareholders vote on his compensation package at the firm’s annual meeting, scheduled for 6 November, alongside a proposal for the company to invest in his AI venture xAI.
