Tesla (TSLA) stock has whipsawed since President Donald Trump’s reelection in November 2024. In December, Tesla hit its all-time high, riding the “Trump trade.” However, the stock came under selling pressure this year in part due to CEO Elon Musk’s political activities.

Musk’s association with Trump and his open embrace of global right-wing leaders negatively impacted investor sentiment, with some surveys showing his politics hurting Tesla’s sales. Musk was also heading the controversial Department of Government Efficiency (DOGE) that was tasked with advising the president on cutting excess government spending.

The ’Musk Leaving Tesla’ Story Has Expired 

Since early April, there have been rumors and reports that Musk was planning to leave DOGE. Incidentally, such reports emerged around the time of a negative event associated with Tesla, starting with its Q1 2025 delivery miss.

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

Finally, late last month, Musk confirmed that he is indeed leaving DOGE as his 130-day tenure as a “special government employee” expires at the end of May. The announcement helped Tesla stock at a time when the price war in the Chinese electric vehicle (EV) industry was heating up following market leader BYD’s (BYDDY) price cuts.

But now, the ‘Musk leaving DOGE’ story has run its course. Going forward, fundamentals will have a far bigger impact on Tesla’s price action than Musk’s political activities and the noise around them.

Tesla’s Delivery Growth Might Be Anemic in Q2

In Q1, Tesla’s deliveries fell to a multi-quarter low, which was partially on account of the Model Y refresh that prompted some drivers to hold back on new purchases. While the company will release its Q2 delivery data early next month, registration data points to a continued slowdown, particularly in Europe.

For instance, registrations of Tesla cars fell by a whopping 67% in France last month, which was far worse than the 12.3% fall in the country’s total car registrations. The company's sales plunged in other markets like Sweden, Denmark, Spain, and Portugal, even though Norway was a bright spot with sales rising threefold. Notably, BYD has already surpassed Tesla’s deliveries in Europe despite entering Europe much later than the Elon Musk-run company.

The Chinese market is also becoming increasingly challenging for Tesla, with its retail sales down 23% year-over-year in the first eight months of Q2. With the price war escalating in the world’s biggest market for electric cars, Tesla might also need to lower prices to stay competitive.

In the U.S., Tesla started offering financing discounts on the refreshed Model Y just a few months after its launch, which does not tell a pretty story about the demand environment in what’s by far its biggest market.

Tesla Robotaxi Set to Launch in June

Meanwhile, Tesla is set to launch its robotaxi service in Austin this month and has reportedly set the date for June 12. The robotaxi launch will be a key event for Tesla as the company has been trying to highlight growth in other businesses like autonomous driving and robotics to deflect attention from the slowing automotive business.

Long-time Tesla bull and Morgan Stanley analyst Adam Jonas, however, advises keeping expectations low from the event. “As is typical for highly anticipated Tesla events, we would keep expectations well contained for the (reported) June 12th Cybercab launch event in Austin. However, we would look for a continued stream of updates for the performance and growth of the network thereafter (numbers of cars, miles, trips, etc.) in the days and weeks that follow,” said Jonas in his note.

All said, the ball is now in Tesla’s court, and the company needs to execute well as other “non-fundamental factors” driving the stock look set to take a backseat for now. While markets don’t really expect the company to hit it out of the park given the macroeconomic environment, investors might be less forgiving of the misses as they have been for the last couple of months, as the ‘Musk back at Tesla’ story seems to have run its course.