TLDR
- Tesla shares gained 3.5% Friday to $411.11, recovering from a 4% weekly loss tied to tech sector weakness
- Company ending Model S and Model X production to retool plants for humanoid robot manufacturing
- Robo-taxi service launched in Austin last June with expansion to nine cities planned by mid-2026
- Stock valuation sits at 390 P/E ratio compared to S&P 500’s 28 as company pursues robotics strategy
- Congress held autonomous vehicle hearings featuring Tesla and Waymo testimony on self-driving rollout
Tesla shares closed up 3.5% at $411.11 Friday, ending a difficult week on a positive note. The gain trimmed weekly losses to 4%.
Broader markets also recovered Friday. The S&P 500 added 2% while the Dow Jones Industrial Average climbed 2.5%.
The stock had dropped in 12 of 17 trading sessions before Friday’s bounce. Coming into the week, shares were up just 6% over the past year.
No company-specific news drove Friday’s rally. Wall Street analysts didn’t issue new ratings or change price targets.
The week’s losses stemmed from a tech sector selloff. The Nasdaq Composite fell almost 4% through Thursday as investors dumped technology stocks.
Revolutionary Manufacturing Decision
Tesla made a groundbreaking announcement about its production future. The company is permanently discontinuing Model S and Model X manufacturing.
Those assembly lines won’t produce new electric vehicles. Instead, Tesla is converting them to build humanoid robots.
CEO Elon Musk views robotics as the next major revenue opportunity. The company currently uses EV profits to fund investments in emerging technologies.
This decision repositions Tesla as both an automaker and robotics manufacturer. The transition will require several years to fully implement.
Tesla’s premium valuation reflects these forward-looking bets. The stock commands a P/E ratio of 390, crushing most competitors.
That figure towers over the S&P 500’s average P/E of 28. It also exceeds Tesla’s own five-year historical average of 98.
Other valuation metrics like price-to-sales and price-to-book ratios remain elevated. These numbers typically scare off value investors.
Autonomous Vehicle Progress
Congressional hearings on autonomous vehicle standards took place earlier this week. Tesla and Alphabet’s Waymo sent representatives to testify.
Lawmakers focused on understanding nationwide self-driving technology deployment. These discussions matter for Tesla’s expansion plans.
The company launched robo-taxi operations in Austin, Texas last June. The service directly competes with Waymo in that market.
Tesla aims to operate autonomous taxis in nine cities by mid-2026. This represents a crucial growth avenue beyond traditional car sales.
Tesla’s business portfolio extends past vehicles. The company manufactures battery storage systems and solar power equipment.
Traditional automakers struggled this week. Stellantis announced EV asset write-downs and suspended its dividend payment.
Stellantis shares plummeted nearly 24% following the announcement. Ford and General Motors have reported similar EV-related write-downs.
Slowing electric vehicle demand has forced manufacturers to reevaluate their strategies. Industry analysts weren’t surprised by these asset impairments.
Amazon stock declined Friday after reporting quarterly results Thursday evening. Alphabet shares had dropped earlier in the week following its earnings report.
Software companies faced pressure from concerns about AI disrupting their business models. This contributed to the broader tech sector weakness.
Tesla’s 52-week trading range spans from $214.25 to $498.83. The company maintains a market capitalization of $1.4 trillion.
Friday’s trading volume reached 3.7 million shares compared to the typical 73 million share daily average.
