NEW YORK, February 4, 2026, 4:11 PM EST — After-hours
Tesla shares dropped 3.3%, ending Wednesday at $408.01. The stock traded in a range from $399.18 to $423.90 during the session. StockAnalysis
This move comes at a sensitive time for TSLA, as investors grapple with whether the next growth driver remains car volume or shifts to software and services, which are trickier to forecast. When uncertainty around the timing and mechanics of that transition rises, Tesla often behaves like a momentum stock.
Investors focused on two key signals: demand trends out of China and upcoming U.S. self-driving regulations. Both are crucial for a company increasingly relying on autonomy and software to justify its premium valuation.
Data from the China Passenger Car Association revealed Tesla sold 69,129 China-made EVs in January, marking a 9.3% increase year-on-year but a sharp 28.9% drop from December. For the full year 2025, Tesla’s China-made EV sales declined 7.1%, with its market share in China’s EV segment slipping to 8% from 10% in 2024, the report said. CEO Elon Musk has indicated that Tesla’s driver-supervised Full Self-Driving system could receive approval in Europe and China as soon as this month. Reuters
Tesla is tweaking its U.S. lineup to offer lower starting prices. This week, it introduced an all-wheel drive Model Y in the U.S., listed at $41,990 on its website. Typically, all-wheel drive—sending power to all four wheels for better grip—comes at a premium. Analysts caution that pushing more lower-cost models could squeeze margins, especially as the market already leans heavily on discounts and financing deals. Reuters
In Washington, Tesla’s vehicle engineering VP Lars Moravy urged Congress at a Senate Commerce hearing to update regulations that currently stifle innovation in the industry. His written testimony warned that failure to lead on autonomous vehicle tech risks ceding control to other countries—especially China—which could end up setting the standards and dominating the global market. Waymo, Alphabet’s self-driving unit and Tesla’s direct rival in robotaxis, also called on lawmakers to break the deadlock on national regulations. Reuters
Moravy emphasized safety and scale in his prepared remarks. He noted Tesla’s Full Self-Driving, or FSD, relies on over 6.5 billion miles of real-world driving data. He called today’s “FSD (Supervised)” a Level 2 advanced driver-assistance system, requiring drivers to remain alert and ready to intervene. According to his testimony, Tesla vehicles running FSD (Supervised) average about 5.1 million miles per major collision.
The wider market offered little help to Tesla. U.S. stocks fell amid concerns over high valuations and doubts about the AI rally’s momentum, with the Nasdaq slipping 1.5%, Reuters reported. “The stock market is having a really hard knowing where to price the stocks,” said Jed Ellerbroek, a portfolio manager at Argent Capital, highlighting the uncertainty over returns from massive AI investments. Reuters
The upside for autonomy faces regulatory hurdles. U.S. auto safety regulators launched an investigation last October into 2.9 million Tesla vehicles with FSD, following reports of crashes and traffic violations. Tesla insists FSD demands active driver supervision and doesn’t make the car fully autonomous. Stricter enforcement or any safety-related setbacks could hamper the rollout investors expect. Reuters
Traders are now eyeing a reshuffled data calendar after a government shutdown delayed releases. The Labor Department’s January Employment Situation report will drop at 8:30 a.m. ET on Wednesday, Feb. 11. The January CPI inflation figures follow at 8:30 a.m. ET on Friday, Feb. 13. Before those, the JOLTS job openings data arrives Thursday, Feb. 5. These reports can shake up yields and risk appetite — and Tesla’s stock seems to be acting like they still carry weight. Bureau of Labor Statistics
