Tesla stock (TSLA) is on a tear this year as enthusiasm for the electric vehicle maker continues to grow. Perhaps ironically, it’s Elon Musk’s support for Donald Trump that has scored Tesla its biggest advantage.
Since Trump swiftly secured the presidential election on Nov. 5, Tesla stock has rallied by an eye-watering 85%.
Many analysts are convinced the rally is not over, thanks to Musk’s prominent role in Trump’s cabinet, heading the newly formed Department of Government Efficiency (DOGE).
However, not everyone is drinking the Tesla Kool-aid just yet.
Some analysts have warned that much of Tesla’s recent upside isn’t linked to corporate earnings or business developments but solely to Musk's political affiliations.
The other shoe to drop could be the stock market, which is massively overvalued based on certain metrics, according to analysts.
2025 Tesla stock price predictions
| Forecaster | Tesla stock 2025 price prediction |
| U.S News | $249.76 |
| Morgan Stanley | $400 |
| Baird | $480 |
| Mizuho Securities | $515 |
| Wedbush | $515-$650 |
| Economy Forecast Agency | $1,109 |
Analysts have cited several reasons to be bullish on Tesla next year, including advancements in fully autonomous vehicle software, the potential regulatory fast-tracking of the robotaxi, and the launch of more affordable compact EVs.
Musk’s ties to President-elect Trump are the icing on the cake.
For these reasons, private equity firm Baird recently raised its TSLA price forecast to $480 in 2025. While that’s not far from Tesla’s current price, it’s a 71% increase from Baird’s previous estimate.
Baird is also optimistic that Tesla’s bottom line will improve thanks to aggressive cost-cutting measures and greater factory utilization. And while Musk claims to be against big government, his EV business will continue to benefit from lucrative carbon credits that are issued by government agencies.
Mizuho Securities analysts led by Vijay Rakesh believe Tesla will maintain its current valuation and continue to grow in 2025. The analysts recently upgraded their TSLA stock price target to $515 thanks to “positive recalibration with the new administration.”
Mizuho’s analysts expect Tesla to benefit from looser regulations and a lax policy environment that could boost demand for EVs.
Wedbush Securities analyst Dan Ives reached a similar conclusion, calling Trump’s election victory a “game changer” for Tesla’s self-driving technology and robotaxi rollout.
Ives also gave Tesla a $515 price target but didn’t rule out the stock reaching a high of $650 in an extremely bullish scenario.
“We estimate the AI and autonomous opportunity is worth at least $1 trillion alone for Tesla and we fully expect under a Trump White House these key initiatives will now get fast-tracked as the federal regulatory spiderweb that Musk & Co,” said Ives.
The Economy Forecast Agency (EFA) believes Tesla’s bull market is just getting started. It recently forecast a massive rally to $1,109 per share by the end of next year. This would imply more than 220% gains from current levels.
The only caveat behind the EFA’s forecast is it’s entirely based on mathematical equations using historical data. In other words, it doesn’t factor in fundamental changes to Tesla’s business.
Compared to these forecasts, Morgan Stanley’s $400 price target for Tesla stock next year seems bearish. However, that’s not the case.
Tesla stock has been ripping so hard since the election that many price targets seem underwhelming by comparison. In the case of Morgan Stanley, the investment bank actually raised its price target by 29% in December.
Morgan Stanley analysts are optimistic about Tesla’s investor base, the company’s vital role in the AI boom, and the continued shift toward renewable energy.
A much more solemn outlook comes from U.S. News, whose analysts gave Tesla a 2025 year-end price target of just $249.76.
In reaching their forecast, the analysts looked beyond the election hype and brimming bromance between Trump and Musk.
Some of Tesla’s 2024 earnings have been disappointing as the company struggles to grow revenues and maintain profitability. At some point, Tesla’s stock price needs to come back down to reality.
“The market is outrunning reality ahead of an expectedly poor year for EV sales,” said Thomas Hughes, a financial analyst.
By Hughes’ estimation, U.S. EV sales growth slowed in 2024 and there’s no evidence it’ll pick up again heading into next year.
4 things to watch next year
Forecasting Tesla stock’s price can seem like throwing darts on a board, but there are tangible signs investors can look for to determine whether the most likely path is higher or lower.
The four biggest factors that can influence TSLA stock in 2025 include:
- EV sales and market share
- Earnings
- Robotaxi
- Regulations
EV sales and market share
While Tesla remains the undisputed leader in EV sales, its market share has declined sharply in recent years.
By the second quarter of 2024, Tesla accounted for less than 50% of the U.S. EV market—down from a high of 82.5% in 2019.
In fact, Tesla has seen the steepest drop in market share in recent quarters. This comes despite EVs accounting for a higher share of total auto sales in the U.S.
According to Cox Automtive, EVs now account for roughly 8% of total auto sales—up from 7.2% one year earlier.
Tesla’s main competition isn’t necessarily budding EV startups, but established automakers that have pivoted to electric and plug-in hybrids. In the U.S. and Europe, some of its biggest rivals include Ford, Hyundai, and Kia.
“Despite Tesla’s declining sales, with its EV sales share now below 50% for the first time, the overall competitive landscape for electric vehicles is intensifying,” said Stephanie Valdex Streaty, an industry insights director at Cox Automotive.
In China, Tesla faces even bigger competition from BYD, a domestic EV manufacturer that recently surpassed Elon Musk’s company in quarterly revenue.
Earnings
With EV competition heating up, Tesla’s quarterly earnings reports will be key to gauging the company’s financial health in 2025.
In the company’s most recent earnings report, Tesla reported improved profits but revenue growth was weaker than expected. The quarter also marked the first reporting period in 2024 when Tesla’s vehicle deliveries increased.
The good news is that Wall Street expects Tesla’s earnings to surge 28% annually next year. But the problem is that its stock trades at roughly 130 times estimated earnings—much higher than the other “Magnificent 7” stocks, which trade at an average of 29 times estimated earnings.
The other problem is that the company’s profitability depends heavily on selling carbon credits.
In 2023, Tesla earned nearly 34 million carbon credits through its EV sales, nearly double the 19.1 million it earned the year before.
Robotaxi
Tesla has proven it can sell cars, but that may not be enough to sustain a profitable business in the future. Especially for a stock that’s trading so far above earnings.
This partly explains why Musk, for years, has talked up the importance of robotaxi—a fleet of driverless vehicles that let Tesla generate income through autonomous ride-hailing services.
You can think of it as Uber without the driver.
Analysts say the robotaxi market could be Tesla’s next big money maker. According to Precedence Research, the global robotaxi market size could reach nearly $189 billion by 2034. That’s a 50% compound annual growth rate.
Musk finally unveiled Tesla’s robotaxi—dubbed “Cybercab”—in October. Investors have high hopes that the new fleet of autonomous vehicles can become a cash cow in a few years. In the meantime, investors will be on the lookout for more updates on Cybercab in 2025.
Regulations
One of the things holding back the Cybercab is regulations. Lawmakers are still trying to address the potential dangers and legal risks of fully autonomous vehicles. Then there’s a spiderweb of federal and state laws to navigate through.
Even Tesla has acknowledged that the “timing of robotaxi deployment depends on technological advancement and regulatory approval.”
Some experts warn that it could take decades for fully driverless vehicles to hit the road.
According to semiconductor IP company Imagination, the day when users can order a fully autonomous vehicle on their smartphone “likely won’t become a reality until 2040 or later.”
Musk is betting that it won’t take that long. During Tesla’s quarterly earnings call in October, Musk told investors that he intends to convince Trump to create a “federal approval process for autonomous vehicles” that could speed up the regulatory process.