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Tesla Shares Are on a Hot Streak — What’s Driving the Surge?

May 21, 2025

4 min Read

Written by Vance Cariaga

Edited by Amber Barkley

Dominika Zarzycka / NurPhoto / Shutterstock.com

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Tesla shareholders are probably used to a bumpy ride from their investments, considering how many extreme highs and lows the company’s stock price has witnessed this decade alone. Lately, the news has been good, as Tesla shares have rebounded in a big way over the last five weeks.

The EV maker’s stock closed at $342.82 per share on Thursday, May 15. That represents a 57% gain from its 2025 low of $218.80 set on April 8, though it’s still well down from a high of $429.80 established in mid-January.

The recent surge comes despite Tesla’s weaker-than-expected first-quarter earnings report, when the company saw declines in both profits and auto revenue. It also follows CEO Elon Musk’s controversial foray into government oversight work.

Here are four reasons Tesla’s stock has been on a rebound of late.

Musk Steps Back From DOGE

Musk has taken a lot of heat in his role as head of the Department of Government Efficiency (DOGE), an organization President Donald Trump created to slash federal government spending. Tesla itself became the target of mass protests, while many of its vehicles and dealerships worldwide were vandalized.

Shareholders and analysts urged Musk to step away from DOGE and focus on repairing Tesla’s brand and operations. As Bloomberg reported last month, one of those analysts — Dan Ives of Wedbush Securities — wrote in a note to clients that Musk needed to “leave the government … and get back to being CEO of Tesla full-time.”

Musk has since announced plans to step back from DOGE and put more time into Tesla, which has given the stock a lift.

New Compensation Package

Musk might not have earned much love in his DOGE role, but there’s no question that investors and analysts consider him a key to Tesla’s future success. Keeping him engaged — and well compensated — is a high priority.

Rumors that Musk could be getting a new pay package at Tesla was enough to give the company’s stock a recent boost, Barron’s reported.

Robotaxi Launch

Another reason for Tesla’s recent stock surge has to do with its Model Y robotaxi program, Investor’s Business Daily reported. The company said it’s on schedule for a June 2025 rollout in Austin, Texas, and expects there to be 10-20 robotaxis on day one of the launch.

“The advancement in [full self-driving]-related features, including a pilot robotaxi launch in Austin later this year, should help create a new era of demand,” said CFO Vaibhav Taneja on the company’s first-quarter conference call.

US-China Trade Deal

Tesla shares also got a lift from a recent agreement between the U.S. and China to declare a truce over escalating tariffs between the two countries. After the deal was reached, Tesla announced plans to start shipping parts from China to the U.S. for use in the production of Cybercab and Semi trucks, Reuters reported.

Tesla had earlier suspended plans to ship the components after Trump raised tariffs on Chinese goods to 145%.

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