Shares of Tesla (TSLA) experienced a slight pullback on Friday, declining 1.43% to close at $435.79, which ended a six-day winning streak. Despite this, the stock managed to post a weekly gain of approximately 2.3% during the holiday-shortened week.
The broader market continued its upward momentum, with the S&P 500 rising 1.4% for its ninth consecutive weekly gain, while the Nasdaq Composite added 2.4%. Growth stocks remained strong, providing some support for Tesla.
In Europe, Tesla's vehicle registrations in the EU, UK, and EFTA surged 46.5% to 10,654 units in April, according to Reuters, marking a continued rebound after over a year of declines. However, Chinese rival BYD saw registrations jump 114.5% to 27,008 units in the same period.
The bigger story for Tesla remains its robotaxi ambitions. Reuters reported that current and former Tesla employees, including ex-data labelers and a self-driving engineer, described software problems with basic driving maneuvers, such as handling school buses and emergency vehicles. Tesla did not respond to Reuters' questions.
Scale remains a significant challenge for the sector. According to Business Insider, citing data from the Texas Department of Motor Vehicles, Tesla has only 42 autonomous vehicles registered in Texas, far behind Alphabet's Waymo, which has 577 vehicles in the state.
Reuters reporters conducted their own tests of Tesla's robotaxi service in Austin and found that half the time they tried it over three weeks in April, wait times exceeded 15 minutes, and in 27% of attempts, no cars showed up. Austin police told Reuters there have been no major crashes or traffic tickets issued to Tesla vehicles.
Tesla's costs are also escalating. In April, the company raised its 2026 capital spending outlook to over $25 billion, driven by investments in AI, robotics, and chips. Tesla also warned of negative free cash flow through 2026, even as CEO Elon Musk said the company was substantially increasing spending to drive future sales.
Despite these challenges, Tesla heads into Monday with support from a firmer market and improving European sales. However, if investors perceive that safety issues, spending, and scaling are outpacing revenue growth, Friday's decline may not be the end of the pullback.
