Tesla Stock Is Up 58% But Elon Musk’s Return Could Change That

Topline

Tesla stock has soared 58% after CEO Elon Musk announced plans to leave DOGE. Can he restore the company’s brand value? If not, the company’s share price may be too high.

Key Facts

Tesla stock is trading 29% below its peak last December. However, the company’s share price bottomed out in early April — around the time of reports CEO Elon Musk would leave the Department of Government Efficiency, noted Newsweek. Since April 8, Tesla stock has risen 58%, according to GoogleFinance.

Does this represent a buying opportunity? The most likely explanation for the rise is investor enthusiasm for Musk’s “24/7” return to Tesla coupled with a temporary reprieve on 50% tariffs on European Union exports to the U.S., according to TipRanks.

Here’s why Musk’s return could be bad for Tesla’s stock:

Tesla’s brand reputation has fallen since 2021.
Tesla China registrations are way down in 2025.
Tesla sales in Europe have plunged this year.
Tesla is offering sub-industry trade-in values on low mileage Cybertrucks.

To be fair, in Tesla’s April 22 earnings call, the company doubled down “on its robotaxi launch in Austin this June, giving investors a near-term growth lever to latch onto,” noted TipRanks.

It is unclear whether Musk is more part of the problem than part of the solution for Tesla investors.

I have requested comment from Tesla and will update this post if I receive a reply.

Tesla’s Eroding Brand Reputation

While polling suggests Republicans expressed more favorable opinions of the brand than Democrats, Tesla’s reputation has fallen over the last five years. Tesla has dropped from eighth place in the 2021 reputation ranking of America’s 100 most visible companies, according to Axios, to ninety-fifth in the 2025 ranking.

For example, in 2024,Tesla fell to sixty-third place and in 2025 is at ninety-fifth — placing “dead last in ‘character,’ while placing near the bottom in ‘ethics’ and ‘citizenship,’ ” noted Axios.

After reporting a first-time sales and profit decline, the bad reputational news for Tesla appears to coincide with Musk’s decision to “go all-in for President Donald Trump,” noted the left-leaning Daily Kos.

Musk’s $288 million donations to Trump’s campaign, his “Nazi salute on Trump’s Inauguration Day in January,” and his actions slashing jobs as leader of the Department of Government Efficiency, likely eroded Tesla’s brand, Daily Kos reported.

Tesla’s China Market Share Drops On Competition

Tesla’s second largest market is China where 2025 sales and registrations are inauspicious. “Although first quarter sales were flat versus 2024, the first seven weeks of the second quarter witnessed a 25% slump in new registrations in China,” according to a report from Citi analyst Jeff Chung featured by MarketWatch.

Tesla’s China woes seem due more to competition than concerns about Musk. For example, Xiaomi’s newly launched YU7 model electric SUV is priced in Tesla’s Model Y $35,000 to $45,000 price range while offering 100 miles more driving range, noted MarketWatch. The YU7 will “significantly erode Tesla’s Model Y market share,” Chung added.

Tesla Europe Sales Plunge On Brand Damage

In Europe, things look worse for Tesla. In April, Tesla sold 7,261 cars in Europe — 49% fewer than the year before according to a European Automobile Manufacturers’ Association report featured by CNBC.

While Tesla’s brand in Europe has been damaged, competition and a lack of hybrid electric vehicles — running with traditional fuel and small batteries — in Tesla’s lineup are also costing the company market share.

Last week, a report said China’s BYD sold a greater number of pure EVs in Europe than Tesla for the first time, noted CNBC. What’s more, 35% of European consumers prefer hybrid EVs, according to ACEA data.

European Union new car registrations data revealed more bad news for Tesla. The company’s “market share for the first four months of 2025 almost halved to just 1.1%, and its April figures were even worse with just 0.7%,” MarketWatch reported.

Cybertruck Trade-Ins At 34.6% Discount

Tesla’s Cybertruck is not a significant part of the company’s revenue — but it symbolizes the challenges facing Musk. In December 2023, Cybertruck sales appeared poised to sell far fewer — 75,000 — than the two million reserved, according to my December 2023 Forbes post.

The Cybertruck was designed to appeal to a small number of buyers and would be difficult to manufacture at scale. The vehicle was an “Apocalypse-bunker-on-wheels,” wrote Streetsblog. Social media compared the Cybertruck’s design to “a roided-out Blade Runner jalopy and an industrial refrigerator,” noted my 2023 post.

Meanwhile, the Cybertruck’s outer shell was hard to bend and manipulate. Tesla has been challenged to “shape the material into body panels that line up correctly and don’t result in large gaps when installed” reported the Wall Street Journal. “On top of that, it is so hard and strong that it can be difficult to flatten,” added the Journal.

After numerous technical problems and recalls, Cybertruck sales fell short of my predictions.” Only about 40,000 people ended up converting their reservations into orders,” noted Electrek.

And after avoiding consumer requests for trade-ins, Tesla is now offering buyers $65,400 for Cybertrucks with only 6,000 miles on the odometer. That represents 34.6% depreciation in just a year which compares unfavorably to the 20% depreciation of pickup trucks, Electrek reported. Pickup trucks generally lose about 20% of their value after a year.

Tesla Stock May Be Overvalued

Tesla stock trades above its price target. According to 37 Wall Street analysts, Tesla’s average price target of $282.70 means the company’s stock is 23% over-valued as of this writing, noted TipRanks.

If Musk’s robotaxi dreams boost Tesla’s revenue and profit ahead of expectations, those analysts will end up being wrong. As for winning back disaffected EV buyers, Musk faces a tall task of undoing undo the damage he has inflicted on Tesla’s brand.