Tesla stock falls 3.5% despite optimism over FSD and robotaxi plans

Highlights

- Tesla shares declined 3.5% amid a sharp drop in European EV registrations, down 40% year-over-year in July.

- Analysts remain divided, with some maintaining bullish targets based on AI and Full Self-Driving developments.

- In the near term, the stock is expected to trade between $330 and $350 as markets weigh growth potential against delivery risks.

Technically, the $348–$350 range now appears to be acting as a near-term resistance zone. This level aligns with the upper bound of Tesla's recent price action and could serve as a psychological ceiling for bulls. If broken, the next upside target would likely be around $365, a level last tested in early August. This resistance is further reinforced by weak volume on recent approaches to that range, suggesting a lack of conviction from buyers. Unless a strong catalyst emerges, such as a bullish AI announcement or delivery beat, breaking above $350 may remain difficult in the near term.

On the downside, immediate support rests near $330, where buyers have previously stepped in during brief selloffs. A breakdown below this could send shares retesting the $320 handle, particularly if macro or company-specific sentiment deteriorates. The 50-day moving average is hovering around $335, now acting as a pivot point in the short term. If Tesla fails to hold above $330 in upcoming sessions, it could trigger stop-loss selling and accelerate downside pressure.

Tesla stock price dynamics (June 2025 - September 2025). Source: TradingView

Momentum indicators suggest a mixed picture. The Relative Strength Index (RSI) has dipped below 50, reflecting weakening bullish momentum. Meanwhile, MACD lines are flattening out, a potential sign of consolidation unless a decisive breakout or breakdown occurs. The declining RSI trendline also signals that each bounce is losing strength, hinting at exhaustion among short-term buyers. Unless momentum reverses quickly, Tesla may struggle to find direction and remain range-bound heading into mid-September.

Europe EV market share decline clashes with AI enthusiasm

Tesla is facing renewed pressure in its core vehicle business, particularly in Europe, where new data shows a 40% year-over-year decline in July registrations. Year-to-date, European deliveries are down 33.6%, according to Bank of America. This underperformance is largely attributed to intensifying competition from Chinese automakers like BYD and established European brands accelerating their EV rollouts.The erosion of market share in Europe is particularly concerning because the region has historically been a growth engine for Tesla’s Model 3 and Model Y. Falling registrations may also suggest demand elasticity in the face of reduced pricing power and rising local alternatives. Regulatory shifts and localization strategies by competitors further threaten Tesla’s footprint in this market.

Despite these headwinds, Tesla continues to win praise for its advancements in AI and autonomy. Piper Sandler reaffirmed its Buy rating, maintaining a $400 price target, citing confidence in Tesla’s Full Self-Driving (FSD) program and the upcoming robotaxi platform. The firm views Tesla as more than an automaker—positioning it instead as a software and AI-driven mobility company.

Choppy trading expected in near term

In the short term, Tesla is likely to remain range-bound between $330 and $350, as investors weigh AI enthusiasm against concrete delivery figures and margin concerns. The stock’s beta remains high, meaning it is particularly susceptible to broader market moves and interest rate sentiment. This heightened sensitivity means even modest macroeconomic shifts—such as changes in inflation outlook or bond yields—can trigger sharp intraday moves.

A potential upside case emerges if Tesla delivers a significant update on Full Self-Driving progress or unveils new details about its robotaxi platform, which could push shares toward the $360–$375 range. Such developments would likely reignite institutional interest and bring momentum buyers back into the stock. If broader tech sentiment also rebounds—particularly in response to lower yields or renewed enthusiasm for AI—the stock could reclaim higher ground.

Tesla’s European market position is deteriorating, with July 2025 registrations plunging 40% year-over-year to 8,837 units. This marks the seventh straight month of declining sales across key regional markets, highlighting growing competitive pressure.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.