Tesla stock falls 2.4% as robotaxi gains fade amid safety concerns
Videos shared on social media showed Tesla's autonomous vehicles making traffic infractions
Tesla Inc. (NASDAQ: TSLA) experienced a rally earlier this week, sparked by the unveiling of its robotaxi service in Austin, Texas.
However, as of June 25, it has retraced, trading at $340.47, representing a 2.4% decline in the past 24 hours.
Highlights
- Tesla stock is trading above key moving averages but shows signs of short-term overbought conditions.
- The launch of its robotaxi service in Austin has fueled optimism, though safety concerns have triggered a federal investigation.
- Analysts are split, with price targets ranging from $215 to over $400 depending on regulatory outcomes and market adoption.
The stock is currently trading above both its 50-day and 200-day moving averages, which stand at $327.35 and $334.27, respectively. This crossover above long-term averages signals a bullish trend continuation. The Relative Strength Index (RSI) is at 65.2, suggesting that while momentum is strong, the stock is approaching overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) remains positive at 7.39, reinforcing the view of sustained bullish momentum.
However, not all technical indicators are unequivocally optimistic. The Stochastic Oscillator is hovering at 84.3, which is deep into overbought levels. This raises the possibility of a short-term consolidation or minor pullback. Volume levels have also started to taper off following the initial surge, indicating that enthusiasm may be cooling slightly as traders take profits.
TSLA stock price dynamics (April 2025 - June 2025). Source: TradingView
The key resistance levels to watch are at $365, $430, and $489. These levels have historically served as turning points for the stock, and any movement past them would require substantial volume and positive sentiment. On the downside, strong support exists around $320 and more critically at $285. If the stock fails to hold above the 200-day moving average, a deeper retracement into these zones could follow.
Robotaxi debut sparks optimism amid regulatory scrutiny
Tesla's robotaxi initiative, operational in a limited 10-square-mile zone in Austin with a fleet of 20 modified Model Y vehicles, has been met with both enthusiasm and scrutiny. The service, priced at a flat $4.20 per ride, uses Tesla's Full Self-Driving (FSD) software and includes safety drivers for now. Early users, including prominent tech analysts, reported positive experiences, fueling investor optimism.
However, the rollout has also attracted negative attention. Videos shared on social media showed Tesla's autonomous vehicles making traffic infractions, including improper lane changes and speeding. These incidents prompted the National Highway Traffic Safety Administration (NHTSA) to initiate an investigation into potential safety violations. The outcome of this scrutiny could impact Tesla’s future deployments and investor sentiment.
Institutional opinions are mixed. UBS reiterated its “Sell” rating, albeit with a raised price target of $215, indicating skepticism that the robotaxi narrative is already fully priced in. Goldman Sachs expressed concern over competitive pressure, noting that Alphabet's Waymo appears to be ahead in terms of both technological development and real-world deployment.
Short-term gains possible, but volatility expected
In the short term, Tesla stock appears positioned to retest the $365–$370 resistance band. Should it break through on strong volume and positive regulatory developments, it may approach the $430 level. However, traders should be cautious of volatility stemming from ongoing regulatory reviews and the potential for broader market corrections.
If bullish momentum fades, a pullback toward the $320 support level is likely, with deeper downside risk extending to $285 if sentiment deteriorates further. Investors should closely monitor updates from the NHTSA and future robotaxi performance metrics, as these will be critical in shaping near-term price action. While the long-term vision remains compelling, the short-term path will likely be turbulent.
Market response to Tesla’s robotaxi launch has been largely positive, with analysts like Dan Ives calling it transformational and projecting significant long-term value. However, UBS remains cautious, maintaining a "Sell" rating at $215 due to valuation concerns and potential regulatory hurdles, including new Texas permit requirements.
