New York, May 13, 2026, 06:43 (EDT)
- Tesla slipped 2.6% to $433.45 on Tuesday, ending a brisk four-session rally as traders eyed China market access, execution on its robotaxi plans, and rising inflation headed into Wednesday’s open.
- Bulls are betting on Full Self-Driving getting the green light in China, battery buildouts across Europe, and ongoing growth in the global EV market. Bears, though, point to Tesla’s autonomy business lagging behind the lofty expectations already baked into its valuation.
- Little sign of rate-cut optimism: Polymarket pegged the odds of a Fed hold in June close to 98%. Over at Kalshi, the most likely scenario in its Fed market feed had no rate cuts at all by 2026.
Tesla stumbled on Tuesday, giving back 2.6% to finish at $433.45. That comes after a sharp 14% surge over the last four days. Still, the retreat didn’t exactly put the brakes on the broader narrative; rather, it seemed like investors simply hit pause, with China and AI enthusiasm having sprinted ahead of actual news.
Here’s the crux: Tesla’s future value depends less on pumping out more Model Ys and more on showing that autonomy can actually bring in cash. Elon Musk is slated to join President Donald Trump on a trip to China, where Tesla is pushing for regulatory approval to roll out Full Self-Driving wider in the country’s massive auto market. Reuters noted Tesla is also after approvals for China-related supply needs, like solar manufacturing equipment.
That’s what sent the price swinging. The chart had already started to reflect hopes for a better China scenario—then three hurdles hit together: hotter-than-expected U.S. inflation, weaker robotaxi signals, and the core reality that getting China’s sign-off is about politics and regulation, not only tech. Reva Goujon, a geopolitical strategist at Rhodium Group, told Reuters that many executives on the trip are pushing for “demands on critical input supply,” not just showing up for trade deal fanfare. Reuters
Tesla on Tuesday announced plans to boost battery-cell investment at its Berlin-area facility, committing nearly $250 million. That added capital will take the plant’s planned annual output up to 18 gigawatt hours, more than doubling the previously slated 8 GWh. For investors, it’s not just about the raw energy figure—a gigawatt hour marks battery capacity—but about achieving scale, locking down costs, and moving away from fragmented supply lines.
The autonomy rollout isn’t looking so smooth. Reuters put Tesla’s robotaxi to the test and came away with stories of lengthy waits, “no rides available” pop-ups, confusing drop-off points, and a shortage of cars. In Austin, Tesla’s count hovered around 50 vehicles—Alphabet’s Waymo, by comparison, fielded over 250, a city presentation cited by Reuters showed. That gap chips away at confidence that Tesla can quickly stand up a seamless nationwide driverless network. Reuters
The bull thesis isn’t falling apart. China could light a fire under Tesla’s FSD story. Battery costs out of Berlin might come down. And those bearish on EV demand? Not so fast: Benchmark Mineral Intelligence, via Reuters, put April’s global battery-electric and plug-in hybrid registrations at 1.6 million, a 6% bump from a year ago. Spiking petrol prices are nudging some consumers over to EVs, which lifts the entire segment.
Bears have a little more muscle here. EV registrations in China slipped 8% in April; North America’s numbers tumbled 28%. Over in Europe, Chinese-made EVs grabbed a 22% share of EV and plug-in hybrid sales year-to-date—up from 19% for the same stretch last year. BYD—still the global EV leader—has started discussions with Stellantis and others about possibly taking over underutilized factories in Europe. It’s no longer a contest between Tesla and drowsy legacy automakers.
This earnings call really gets at why Tesla stock swings on every new headline. The company hiked its 2026 capex projection to over $25 billion, channeling that money into AI, robotics, and chips. Musk called the bigger budget “well justified,” arguing it’ll pay off down the road, while CFO Vaibhav Taneja warned Tesla expects negative free cash flow through the end of 2026. Free cash flow refers to what’s left after running the business and paying for big investments. Reuters
This pretty much sums it up: Tesla wants backers to bet on the future, but the market cares about what’s working now. Musk has conceded that robotaxi revenue won’t be “super material” this year—so there’s less danger of a letdown when tests reveal the network isn’t yet robust. Investopedia
Valuation calculations just got tougher. April’s CPI climbed 0.6%, driven in large part by energy goods, which made up over 40% of the gain. According to Reuters, the Fed isn’t likely to cut rates before 2027. That’s a problem for companies banking on outsized profits down the line — higher rates boost the discount rate, eroding the present value of those future earnings.
Prediction markets are telling a similar story. On Polymarket, odds for “No change” at the June Fed meeting hovered between 97.5% and 98%, with just about 1.4% pricing in a possible 25-basis-point cut. The platform’s 2026 rate hike market put the chance of an increase at 27%. Over at Kalshi, their Fed market feed pegged “exactly 0 cuts” in 2026 as the most likely outcome, showing about 63% in the snapshot. Polymarket
Tesla enters Wednesday with the story hanging in the balance. Bulls lean on China, batteries, AI, and signs that global EV demand is turning a corner. On the other side: valuation, rates, BYD, Waymo, and a robotaxi plan that’s clearly still in its early innings. The stock isn’t priced for every Musk promise to hit this week, but at least a couple need to show real traction.
