Tesla (TSLA) stock has had a stellar rally since the company’s Q1 2025 earnings release last month. To be clear, the post-earnings rise didn’t have much to do with the company’s quarterly financials as Tesla missed on both the top line as well as the bottom line. The Elon Musk-run company was barely profitable in the quarter based on GAAP net profits, and that was simply on account of regulatory credits.

However, during the Q1 earnings call, Musk announced his intention of stepping back from his responsibilities at the Department of Government Efficiency (DOGE). The announcement overshadowed the big earnings miss, and Tesla stock soared following the Q1 report.

Tesla Stock Has Rallied Sharply Since Q1 Earnings Release

The rally gained wings after positive progress was made in U.S.-China trade talks. Both sides have removed “reciprocal tariffs,” although Chinese imports into the U.S. will still face a 30% tariff, which includes the 10% base tariff and 20% “fentanyl-related tariffs.”

As I noted previously, Tesla shares have reacted strongly to President Donald Trump’s policies. The stock soared after Trump’s election on hopes of economic growth and more favorable regulatory policies, particularly in autonomous driving and artificial intelligence (AI). However, Tesla stock saw a selling spree amid the tariff chaos and underperformed the markets badly.

As Trump works to sign trade deals, there are signs that Elon Musk’s companies will be beneficiaries. For instance, India is said to be prioritizing Tesla’s market entry over its Chinese rival BYD (BYDDY).

To sum it up, by stepping back from DOGE responsibilities, Musk might be able to disassociate from one of the most polarizing and controversial initiatives of the Trump administration. At the same time, Tesla would stand to gain from favorable trade deals with other countries. It looks like the best-case scenario for Tesla investors after the commotion over Musk’s political activities.

Meanwhile, Tesla disappointed with both its Q1 deliveries as well as earnings. We will get updates on the company’s performance in early July when it will release its Q2 deliveries, which will be followed by the Q2 confessional later in the month. However, in June, Tesla is slated to begin its robotaxi service in Austin. The importance of that event cannot be overstated, as by Musk’s assertion, the bulk of Tesla’s current valuation is related to autonomous driving, which would power its robotaxis.

Will Tesla Meet the June Deadline for Robotaxi Launch?

Tesla and Musk are not exactly known for sticking to deadlines. The company has missed nearly every timeline over the last decade, as even the robotaxis were previously scheduled to launch in 2020. While the COVID-19 pandemic can be blamed for the delay, from the Cybertruck to autonomous driving, Tesla has been found wanting on its aggressive deadlines.

While Musk reiterated the commitment to a June robotaxi launch during the Q1 earnings call, recent reports suggest that not everything is in place for the widely awaited launch. For instance, with just weeks to go before the expected launch, Tesla hasn’t yet started testing the robotaxis without a safety driver.

Citing a company engineer and a former employee, a report on The Information says, “That’s a crucial step required before Tesla can launch the pilot service for customers.” For context, Alphabet-backed Waymo (GOOG), whose robotaxis Musk mocked for the high cost of its vehicles during the Q1 earnings call, tested its vehicles without safety drivers for 6 months before launching in Austin.

The National Highway Traffic Safety Administration (NHTSA) has also asked for clarification from Tesla on its robotaxi launch, including on how the vehicles will perform in bad weather.

“The agency would like to gather additional information about Tesla’s development of technologies for use in ‘robotaxi’ vehicles to understand how Tesla plans to evaluate its vehicles and driving automation technologies for use on public roads,” said the NHTSA in its May 8 letter to Tesla. Notably, Tesla’s full self-driving (FSD) has long been in the NHTSA’s crosshairs, and the agency is probing incidents of crashes involving Tesla’s autonomous driving software.

Should You Buy or Sell Tesla Stock Ahead of Robotaxi Launch?

I don’t find Tesla particularly attractive here, even though I am be wary of shorting it given the many “non-fundamental factors” moving the stock in the short term. 

However, with growth in its core automotive business slowing down greatly, a delay or botch of the robotaxi launch is the last thing that Tesla bulls want, particularly after the recent rally.