New York, May 6, 2026, 05:58 EDT
- Tesla ended Tuesday down at $389.37, after investors digested news of a U.S. recall and uncertainties from European regulators.
- Tesla is recalling 218,868 cars in the U.S. due to delayed rearview camera images, according to regulators.
- The bigger question for the stock is whether investors buy into Elon Musk’s push for autonomy, with Europe still scrutinizing Full Self-Driving.
Tesla shares face pressure heading into Wednesday’s U.S. session, as the National Highway Traffic Safety Administration announced a recall affecting 218,868 vehicles nationwide. The issue: rearview camera images may lag when shifting into reverse. Affected models include certain Model 3, Model Y, Model S, and Model X vehicles. Tesla is addressing the problem with an over-the-air software update, allowing owners to get the fix without visiting a service center.
Tesla’s market cap these days leans heavily on software, autonomy, and robotics—not just car sales. The company’s Full Self-Driving, or FSD, system handles much of the driving, although drivers must stay alert and keep their hands ready.
Tesla finished Tuesday’s session at $389.37, slipping 0.8%. Its latest quoted market cap hovered close to $1.38 trillion. That pullback played out despite a generally upbeat tone in U.S. markets—index futures advanced Wednesday, buoyed by artificial-intelligence enthusiasm and renewed U.S.-Iran peace hopes, according to .
Investors have more on their plates than just the recall. On Tuesday, Belgium’s Flanders region said it’s exploring how soon it might roll out Tesla’s supervised FSD, following a provisional green light in the Netherlands. Flanders Transport Minister Annick De Ridder urged that regulators shouldn’t “slow down innovation,” stressing the need for things to move forward “in a thoughtful and safe way.” Reuters
Europe’s picture is still mixed. Regulators from the Netherlands, Sweden, Finland, Denmark, and Norway flagged issues in emails reviewed by Reuters, citing worries that the system encourages speeding, struggles on icy roads, and might let drivers bypass anti-phone-use protections. Tesla declined to comment when contacted by Reuters.
There’s still optimism among some investors about potential gains from a European opening. Michael Ashley Schulman, partner at Cerity Partners—which holds Tesla in its portfolio—argues that securing European FSD approval could boost profit and help Tesla defend against Chinese rivals. On the regulatory side, though, Swedish Transport Agency investigator Hans Nordin admitted he was “quite surprised” to discover Tesla let FSD exceed speed limits. Reuters
Sales data offered Tesla some relief. April saw new Tesla registrations more than double in Sweden, France, and Denmark, and increase in the Netherlands. Registrations slumped, however, in Norway, Spain, Portugal, and Italy. Andy Leyland, co-founder at SC Insights, pointed to a likely rebound for European EV sales, citing incoming models, stronger performance, and pricier gasoline—though he flagged that monthly registration numbers can be volatile depending on delivery schedules.
Competition isn’t hitting pause. BYD, Chery, Changan, and SAIC’s MG are pushing out fresh models built for buyers abroad, ranging from compact hatchbacks in Europe to pickups aimed at Australia and Mexico. Stella Li, a BYD executive, told Reuters the Dolphin G matters for the company—hatchbacks make up over 40% of new car sales in parts of southern Europe. “If we don’t have the right car in this sector, we lose.” Reuters
Lucid, one of the U.S. electric vehicle players, pulled its full-year outlook after a supplier snag slowed Gravity SUV shipments. Quarterly revenue came in at $282.5 million—well under the $440.4 million analysts had in mind. Shares dropped more than 8% after hours.
Tesla’s central stock-market pitch keeps circling back to spending. Just last month, the company bumped up its planned 2026 capital expenditures beyond $25 billion, with Musk channeling money into AI, robotics, and custom chips. CFO Vaibhav Taneja described this as a “very big capital-investment phase,” warning that negative free cash flow is likely for the rest of 2026; that’s what’s left after covering operating costs and big-ticket investments. Reuters
On the April earnings call, Musk pushed back on concerns over the spending. “We are going to be substantially increasing our investment in the future,” he told analysts, arguing that outlays were “well justified” given the revenue Tesla expects down the line. The dilemma for Tesla stock: will investors see enough headway on robotaxis, Cybercab production and FSD approvals before those hefty investments begin to weigh on the story? Reuters
