Tesla stock price did well in 2025 even as the company faced major headwinds. It jumped to the psychological level at $500, up by 132% from its lowest level during the year, bringing its market capitalization to over $1.5 trillion. So, will the rally continue rising this year?
Tesla Faces Major Headwinds This Year
TSLA stock price jumped even as the company faced major headwinds during the year. One of the minor headwinds is that investors dumped Bitcoin treasury companies like Michael Saylor’s MSTR, Metaplanet, and Strive Capital. Tesla is one of the biggest players in the industry with over 11,500 coins valued at over $1 billion.
Second, CyberTruck, a product that spent billions of dollars to develop, flopped. Data shows that the product sold 6,406 vehicles in the first quarter, 4,306 in Q2, and 5,835 in Q3. Sales have dropped sharply and will likely not reach Tesla’s goal of 250k vehicles annually.
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Tesla Deliveries Dropped in Q4
Third, Tesla’s deliveries jumped in the third quarter as customers anticipated the end of EV credits. This trend reversed in the fourth quarter, with analysts anticipating an 11% YoY drop to 440k.
These numbers mean that the company delivered about 1.6 million vehicles this year. This number is much lower than the 3 million that analysts were expecting.
Tesla stock also jumped even as the Trump administration ended the popular $7,500 EV tax credit. It also ended the profitable tax credits that were the most profitable part of its business.
Therefore, the Tesla stock rallied as investors bought the artificial intelligence (AI) and robotics theme. Elon Musk has positioned the company to be a major beneficiary in the autonomous vehicle industry, which he expects to be the next big thing in the next decade.
However, this hype has not yet translated to sales, and its pilot project in Austin has faced legal scrutiny as the vehicles flouted traffic rules. In a mote, Gene Munster, a top analyst, said:
“Investors have fully bought into his autonomous vision, which comes at a good time, as Tesla’s EV business will likely be flat to up 5 percent next year.”
The other major headwind is the rising competition in China, where companies like BYD, XPeng, Nio, and Xiaomi are releasing more advanced models at a cheaper price. Most of these firms have continued to gain market share in the past few years.
Most importantly, Tesla became one of the most expensive companies in the United States. Data compiled by Seeking Alpha shows that the company has gained a forward P/E ratio of 350. In contrast, Nvidia, a company that is seeing more growth has a multiple of less than 50.
Tesla Stock Price Technical Analysis
The daily chart shows that the TSLA stock price peaked at $500 in 2025 and then pulled back to the current $450, its lowest level since December 12.
It has remained above the 50-day and 100-day Exponential Moving Averages (EMA). It is also slightly higher than the strong pivot reverse level of the Murrey Math Lines at $437.
The stock has also moved to the middle of the ascending channel shown in purple. Therefore, the most likely scenario is where the stock drops to the psychological point at $400 and then resumes its uptrend.
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