It has been a rather volatile week for the stock market, with geopolitical tensions rising. However, there is still glowing optimism for how Tesla (TSLA) will perform over the course of 2025. With earnings underperforming, there is still a ton of potential in one key product to come from the EV manufacturer.
Speaking on the underwhelming earnings call that took place this week, CEO Elon Musk claimed that the company could eventually surpass the market value of the five largest companies in the world. Although that proclamation seems far-fetched, there is one thing that could help to propel the stock this year.
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Tesla Stock Underwhelms So Far, But One THing Could Turn It Around
Although there were high hopes for the company, Tesla has not had a strong start to 2025. Even ahead of its most recent earnings data, the stock was falling. It continues that trend Thursday, dropping another 2.2% and falling below the $370 mark.
That is a concerning development for those who expect big things out of the stock. However, there are many analysts who are projecting notable upside for the company. Indeed, many are noting that its biggest market mover of the year hasn’t even arrived yet. Specifically, Tesla (TSLA) is set to see one product drive its growth in 2025.
According to Wolfe Research, that product will be its upcoming Robotaxi launch. The firm notes that the self-driving product will be the most important facet of its stock price this year. That is especially true as the firm faces continued challenges in the automotive sector.
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The firm noted that investors should be cautious in the near term. It projects auto gross margins to fall to 13% from 13.6% in Q4. However, they say “Robotaxi performance is likely to be the key driver of the stock in 2025.”
The product is undergoing a key testing phase and is expected to operate as an autonomous offering in certain Texas cities this year. Moreover, Musk confirmed that they are working on expanding that by year’s end.
With new tariffs bringing a potential $1.6 billion annualized headwind to the company, Wolfe projects a massive challenge ahead. Moreover, it will face regulatory concerns with the Robotaxi product, but Musk’s White House connection could benefit in that area. Either way, the success of the breakthrough technology could have an unprecedented impact.