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May 27 - Tesla (NASDAQ:TSLA) shares edged up about 5% on Tuesday, bringing their rally to roughly 58% since CEO Elon Musk said he would step back from Department of Government Efficiency (DOGE).
Despite the recent upswing, Tesla's brand has struggled. Customer sentiment rankings slid to 95th place in 2025 from eighth in 2021, as stakeholders question its ethics and leadership decisions.
In China, growth has stalled. First-quarter deliveries were flat year-on-year, and early Q2 registrations tumbled about 25% as competitors like Xiaomi's YU7 SUV boast longer driving range at similar prices.
Europe has been even tougher. April sales plunged nearly 50% to around 7,200 vehicles, cutting market share to about 0.7%. Strong demand for hybrid models and BYD's pure EVs has further undercut Tesla's position.
Inventory headwinds are mounting with the Cybertruck. Trade-in values sit at roughly a 35% discount after one year, compared with a typical 20% depreciation for conventional pickups, weighing on margins.
Despite shrinking deliveries, TSLA's shares are climbing on investor faith in Musk's hands-on leadership, potential tariff exemptions boosting profit margins, and anticipation of new growth catalysts such as the robotaxi launch. The surge reflects a market willing to overlook current sales dips for promised long-term innovations and operational gains.
This article first appeared on GuruFocus.