New York, May 29, 2026, 13:03 (EDT)
Tesla shares were down 1.2% at $436.86 Friday afternoon, underperforming the broader U.S. market despite new European approval for its driver-assistance software. The stock was last seen below its Thursday finish of $442.10. The SPDR S&P 500 ETF, tracking the S&P 500, added 0.4%.
Tesla is back to trading like an AI stock, not just a car company. Wall Street’s AI trade is running, with the Dow, S&P 500, and Nasdaq all touching intraday highs on Friday, Reuters reported. “We certainly haven’t seen the last of AI optimism,” said Melissa Brown, head of investment decision research at SimCorp. Reuters
Tesla bulls pointed to a headline win out of Europe. Estonia’s transport authority said Tesla’s Full Self-Driving, or FSD, can operate on its roads after approval that started in the Netherlands. The regulator called FSD a Level 2 driver-assistance tech, so the driver stays fully in charge at all times. Tesla said on X rollout “will begin soon.” Reuters
Tesla’s FSD driver-assist software, which doesn’t make its cars fully autonomous despite the name, is a paid option. In its first-quarter update, the company kept the warning that drivers need to supervise at all times. Tesla said total revenue was up 16% to $22.4 billion, with some support from more sales and subscriptions of FSD.
Tesla’s European registrations jumped 46.5% in April to 10,654 vehicles after consistent drops for over a year, Reuters said this week. But China’s BYD surged past that, with registrations up 114.5% to 27,008. So while Tesla bounced back, competitors like BYD kept gaining ground.
EU new-car registrations climbed 4.2% through April, according to ACEA, with battery-electric cars now at 19.7% of the market. Hybrid-electrics made up 38.2%. Petrol and diesel are dropping back again. Tesla gets some tailwind, but it’s not just Tesla.
Tesla is keeping up big spending. The company upped its 2026 capital spending plan to over $25 billion, covering factories, gear and other long-term buys, with Elon Musk saying Tesla is “substantially increasing our investment in the future.” CFO Vaibhav Taneja called it a “very big capital-investment phase” and warned of negative free cash flow for the rest of 2026. Reuters
Clean risk for the stock is that regulatory sign-off could come before Tesla wins user trust. Reuters said Thursday that former Tesla data labelers and an ex-self-driving engineer see FSD still having trouble with some basic driving tasks. Tesla didn’t answer the detailed questions Reuters sent for the story. Carnegie Mellon’s Phil Koopman took aim at Tesla’s safety claims, arguing, “Any new car is dramatically safer than a 12-year-old car.” Waymo safety researcher John Scanlon added, “We’ve got to be really careful with the language we use.” Reuters
China is still a swing factor. Tesla wants to expand FSD in the country, but CFO Taneja said during last month’s earnings call that “the broader approval is still not there.” Tesla is hoping for approval by the third quarter, Sherwood News reported last week. Sherwood News
Tesla shares ended Friday with a mixed picture. The company picked up new regulatory approval in Europe and saw better registration numbers there, but BYD is still outpacing Tesla’s growth in the region. Waymo is still a key rival in robotaxis. Tesla trades at about a $1.55 trillion market cap with a P/E near 401, so any minor setback on FSD, robotaxis, or demand can hit the stock.
