Tesla stock surges but experts warn it may be temporary

Tesla’s stock is on the rebound thanks to some big announcements by Elon Musk but experts have urged investors not to get too excited.

Tesla shares have surged more than 16 per cent in five days but experts warn the increase may be temporary.

According to eToro market analyst Farhan Badami, the spike comes as the auto giant prepares to launch Robotaxi in the US and its status awaiting Full Self-Driving Capability (FSD) in Europe.

“Tesla has been on a solid run with its stock price up over 16 per cent in the last five days,” he said.

The increase comes despite Tesla’s recent rejection of the “Robotaxi” trademark by USPTO who said the name was too generic.

Badami said the setback “may pose a small speed bump” but its unlikely to have much impact on Tesla’s share price in the long run.

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Tesla Robotaxi. Picture: Supplied

“Despite the term’s rejection by the USPTO, Tesla can continue to develop its Robotaxi services, which are expected to generate significant revenue in the future.

“There may also be a silver lining for Tesla here, actually, if they’re able to come up with a catchy alternative term for its Robotaxi fleet that they are able to own across marketing channels.”

Badami said investors were more concerned about Tesla’s earnings performance, market trends and ongoing trade tensions than “whether the Robotaxi name is rejected”.

“Besides, investor interest seems to be driven more by the product’s potential than branding, and previous announcements have only created short-lived stock price movements,” he said.

The rise in stock price is also thanks to easing of US-China trade tensions, which has helped drive investor optimism.

“The 90-day pause in reciprocal tariffs will alleviate cost pressures on Tesla, which relies on China for components, as well as exporting vehicles like the Model S and Model X to the country,” he said.

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The photo taken on April 27, 2025 shows BYD electric cars waiting to be loaded to the automobile carrier BYD "Shenzhen", which will sail to Brazil from the Taicang Port in Suzhou, in China’s eastern Jiangsu province. (Photo by AFP) / China OUT

China remains critical for Tesla, making up 36.7 per cent of Tesla’s global deliveries in 2024, the EV maker’s second-biggest market.

“The tariff pause ensures smoother and cheaper sourcing of critical parts,” he said.

Despite the surge, Badami warns that Tesla’s “short-term boost” may be short-lived.

“It looks like this is a short-term boost for Tesla, but they still need to win over Wall Street by improving their balance sheet to attract serious investment,” he said.

Badami explained that the temporary nature of the tariff relief meant market conditions could shift quickly.

“The key thing to understand is that the tariff pause is temporary, and renewed tensions could reverse gains,” he said.

Additionally, increased competition from Chinese automakers, such as Build Your Dreams (BYD) is intensifying.

BYD is expected to surpass Tesla as the world’s largest EV maker in 2025.

“Despite this recent uptick, Tesla’s share price is still down year-to-date,” he said.

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Originally published as Tesla stock surges but experts warn it may be temporary