As 2025 draws to a close, Tesla's stock has risen 25.29% for the year despite recent dips and earnings misses. Analysts offer varied predictions, with bull cases highlighting AI-driven growth in robotaxis and robotics, while bears point to intensifying EV competition and eroding market share. The company's future hinges on executing ambitious plans in autonomy and beyond traditional vehicles.
Tesla Inc. (NASDAQ: TSLA) ended 2025 with a 25.29% stock gain, though it shed 2.59% over the past five trading sessions following a 3.53% rise in the prior five. The rally from early summer was tempered by an AI-induced sell-off in late October and November. On October 22, 2025, Tesla reported third-quarter revenue of $28.1 billion, a 12% year-over-year increase, but earnings per share of 50 cents missed estimates of 54 cents, and net income dropped 37% to $1.37 billion.
In the bull case, Tesla's growth is tied to its Cybertruck, full self-driving (FSD) technology, robotaxi network, and Optimus humanoid robot. The Cybertruck featured prominently at Tesla's robotaxi event, with potential for expansion aided by Elon Musk's ties to the Trump administration. Analysts like Wedbush Securities' Dan Ives see shares reaching $550, a 33.67% upside from current levels, while Cathie Wood of ARK Invest projects $2,600 by 2029, citing a multi-trillion-dollar autonomous ride-hailing market. Optimus could drive reacceleration to 25-30% growth by 2030, per some views, and Musk's Master Plan IV suggests it might represent 80% of future sales. Recent analyst upgrades include Stifel's $483 target (from $440, Buy), Canaccord's $490 (from $333, Buy), Mizuho's $450 (from $375, Outperform), Benchmark's $475 (from $350, Buy), and Goldman's $315 (from $285, Neutral). Musk's new $1 trillion pay package incentivizes aggressive growth in AI and robotics.
The bear case emphasizes Tesla's core EV business struggles. As the third-largest global EV maker behind two Chinese firms, its U.S. market share has fallen to 40% of new EV sales. Challenges include expired EV tax credits, slumping sales in China, negative growth forecasts, eroding margins, and a stale lineup. A March 2025 Cybertruck recall affected nearly all units due to crash risks, and Tesla topped the Insurance Institute of Highway Safety's list for fatal accidents at 5.6 per billion miles versus the 2.8 average. Protests and vandalism have hit the brand globally, while institutional sellers outnumbered buyers 2,177 to 1,605 over the past year, with ownership at 48.12% and 118 funds liquidating positions. Competition intensified in April 2025 with Jeff Bezos-backed Slate launching $30,000 EVs billed as the 'anti-Tesla.' UBS maintains a Sell rating with a $215 target.
In the base case, nearer-term EV sales and potential affordable models like the rumored Model Q provide stability, with Tesla trading at 235.25 times forward P/E and 16.80 times P/S, seen as slightly undervalued. Political controversies from Musk's involvement, including his Department of Government Efficiency role, add uncertainty, though his innovation track record bolsters optimism among bulls.
