Elon Musk’s tenure as the head of the Department of Government Efficiency was ultimately a distraction from his company, Tesla (TSLA). At least that is what many company shareholders and analysts appear to believe. 

Thus, as his tenure at DOGE came to an end in May, Tesla investors heaved a sigh of relief as Musk will now be able to direct his efforts completely toward his companies. Consequently, after a tumultuous start to the year, the Tesla share price has risen a significant 17.6% over the past month, regaining its place in the trillion-dollar market capitalization club.

Now, another possible trigger in the very near term for the stock is the launch of the company’s robotaxi services in Austin. Various news reports have cited that the electric vehicle leader is targeting June 12 for the rollout of the service. 

So, with an active Musk at the helm, and the upcoming launch of the much-hyped robotaxi service, is Tesla stock finally poised for a sustained rally? Let’s find out.

Sound Financials… Over the Long Term 

In recent quarters, Tesla’s numbers have disappointed the Street one too many times. The most recent quarter was no exception.

However, the long-term picture is quite positive. Over the past 16 quarters, Tesla’s quarterly numbers have exceeded expectations on 10 occasions.

Meanwhile, the latest Q1 2025 results were disappointing but understandable, especially for a company that is focused on developing some of the most exciting technology products and services of this century.

Tesla reported a 9% decline in total revenue year-over-year, bringing in $19.3 billion for the quarter. The company’s core automotive division was hit particularly hard, experiencing a sharp 20% drop in sales to $13.9 billion. In contrast, other business units showed resilience. The energy generation division delivered a notable 67% growth in revenue, while the services segment rose 15% from the same period a year earlier, reaching $2.7 billion and $2.6 billion, respectively.

Profitability came under greater strain during the period. Earnings per share plunged 40% to $0.27, falling well short of the $0.41 consensus forecast. This earnings miss was primarily driven by higher input costs and a deceleration in vehicle sales volumes.

Vehicle deliveries mirrored the downtrend, slipping 13% year-over-year to 336,681 units during the quarter.

Despite these challenges, Tesla demonstrated renewed strength in cash generation. Operating cash flow surged to $2.2 billion, a major turnaround from the $242 million reported in the same quarter last year. Additionally, the company returned to positive free cash flow, recording $664 million after a steep outflow of $2.5 billion during the year-ago period. Tesla exited the quarter with a robust cash position totaling $37 billion.

Much More Than Just Cars

Notwithstanding the occasional hiccups along the way, Tesla’s financial strength is derived from its material developments in a range of industries spanning artificial intelligence (AI), robotics, energy storage, supercomputing, and obviously, electric vehicles.

Tesla is planning to launch more affordable variants using existing production lines. This will help the company reach consumers at a lower price point without needing to pour more money into new factories. That’s a win from a capital efficiency standpoint. Further, the adoption of full self-driving (FSD) is up, thanks to performance gains and fewer driver interventions.

In terms of energy storage, its home energy storage system’s latest iteration, Powerwall 3, crossed the 1 GWh mark last quarter. Megapack deployments, especially out of the Shanghai Megafactory, are also ramping hard. Further, Tesla is setting up a lithium refinery and a cathode facility in Texas. This should help with cost, cut reliance on foreign supply chains, and allow Tesla to build batteries cheaper and faster, without trade barriers getting in the way.

Then comes the opportunity for the Optimus humanoid robots, a segment about which I reckon Musk is most excited about. He has suggested that the financial upside linked to this initiative could exceed $10 trillion, reinforcing the company’s broader ambition of deploying several thousand humanoid robots into its manufacturing lines before 2025 concludes. Looking further ahead, Tesla has laid out an expansive vision to scale this deployment to as many as 1 million operational units by the early 2030s, signaling a decisive move toward deep automation across its industrial footprint.

Meanwhile, Tesla is also attempting to fundamentally transform the way vehicles are assembled through its “unboxed” production methodology. In contrast to the conventional assembly-line model, which builds vehicles sequentially, Tesla’s approach involves constructing major components, such as the front and rear structures, the cabin, and the underbody, simultaneously. Musk believes this innovation could compress assembly time to just one vehicle every 5 seconds, a dramatic leap from the current best rate of one every 33 seconds at the Shanghai Gigafactory. Beyond speed, this system has the potential to reduce the spatial demands of factories, streamline logistics, increase robotic efficiency, and potentially create better working conditions. It is also viewed as a critical enabler for launching a sub-$25,000 Tesla model while preserving profitability.

Analyst Opinions on TSLA Stock 

Overall, the analyst community has an average rating of “Hold” for Tesla stock, with a mean target price of $290.08, which has already been surpassed. However, the high target price of $500 implies upside potential of about 47% from current levels. Out of 41 analysts covering the stock, 16 have a “Strong Buy” rating, two have a “Moderate Buy” rating, 13 have a “Hold” rating, and 10 have a “Strong Sell” rating.