Tesla stock rises 1.2% as Musk xAI plan and political moves test investor patience
Tesla shareholders will vote on whether the company should invest in his AI venture, xAI
As of July 11, Tesla stock is trading at $313.51, up 1.2 percent in the last 24 hours.
Despite the recent uptick, Tesla remains in a technically precarious position, facing both market headwinds and company-specific controversies.
Highlights
- Tesla is trading below key moving averages, with $330 acting as critical resistance and $295 as short-term support.
- Investor sentiment is pressured by Elon Musk’s political ambitions and a proposed xAI investment vote.
- European sales weakness and lack of clear catalysts may keep the stock range-bound in the near term.
Tesla is currently trading below its key long-term moving averages, including the 50-day, 100-day, and 200-day SMAs. The 200-day SMA, hovering near the $330 mark, acts as a major resistance level. To regain a bullish posture, Tesla would need to convincingly break and close above this level, ideally with rising volume to confirm buyer commitment.
The stock’s recent trading range has been volatile, with intraday lows touching $295.93 and highs near $314.03. This range puts Tesla in a consolidation phase, and while the current price bounce may appear encouraging, the broader trend remains bearish until more technical levels are reclaimed. Oscillators such as the RSI and MACD continue to signal a lack of momentum. RSI hovers in the neutral zone near 48, neither overbought nor oversold, suggesting a potential for either direction, but lacking a clear trend signal.
Tesla stock price dynamics (May 2025 - July 2025). Source: TradingView
Support lies initially at $295, which has held during the past week’s pullbacks. A breakdown below this would likely expose the $280 zone, where some buyers may step in. Conversely, any move above $314 must be followed by a clean push through $330 to confirm a bullish reversal pattern.
Investor anxiety around Musk's political ventures
Beyond the technicals, Tesla's stock is being shaped by growing concerns around Elon Musk's increasing political involvement. Most notably, Musk announced that Tesla shareholders will vote on whether the company should invest in his AI venture, xAI. While Musk clarified that he personally favors a Tesla-first approach, the potential dilution and distraction this could cause has raised red flags among analysts.
Moreover, a recent political development has added further complexity. Musk announced the formation of a new political party in the United States, prompting backlash from financial stakeholders. An anti-ESG investment firm has already delayed launching a Tesla-focused ETF, stating that Musk had "gone too far." These actions are beginning to erode institutional confidence, especially as Tesla remains dependent on maintaining a strong ESG profile to attract long-term capital.
Tesla's European operations are also facing pressure. Sales in Europe dropped by nearly 50 percent in April, a worrying trend that reflects increased local competition and potential reputational damage from Musk's polarizing public persona. Analysts at Wedbush and Piper Sandler have both revised down their short-term expectations, citing political distractions and delivery weakness.
Three possible paths into August
In the base-case scenario, Tesla is likely to remain range-bound between $295 and $330. Without a decisive catalyst such as a rebound in European sales or clarity on the xAI vote, the stock may continue consolidating, drifting sideways in this broad range.
In the bear-case scenario, Tesla breaks below the $295 support zone. This could happen if the xAI vote results in shareholder backlash or if further political headlines intensify ESG concerns. In the less probable bull-case, a positive shareholder reaction to the xAI proposal, combined with an earnings surprise or a reversal in European sales, could propel Tesla back above the 200-day moving average at $330.
Tesla's stock rebounded after Musk announced plans to expand the robotaxi pilot to the Bay Area, signaling confidence in its FSD and long-term mobility strategy. However, Q2 2025 deliveries fell 13.5% year-over-year to 384,122 units, highlighting ongoing demand concerns and inventory challenges.
