Tesla’s stock(shares) surged to a record high on Wednesday, extending a rally that has unfolded over the past year, even as new data showed the electric vehicle maker’s U.S. sales have fallen to their lowest level in three years.
Shares of the company climbed as investors continued to bet on Tesla’s long-term growth prospects, including its expanding energy business, progress in artificial intelligence and autonomous driving, and expectations of improved margins in 2026. The rally comes after a volatile year in which Tesla’s stock rebounded sharply from earlier losses driven by price cuts, rising competition, and slowing global EV demand.
However, the surge in Tesla’s market value contrasts with weaker performance in its core U.S. market. According to industry estimates cited by Yahoo Finance, Tesla’s domestic vehicle sales declined significantly in 2025, reflecting softer consumer demand, intensifying competition from legacy automakers and Chinese EV brands, and reduced incentives compared with previous years.
Analysts note that investors appear to be looking beyond near-term sales pressures, focusing instead on Tesla’s software ambitions, full self-driving subscriptions, energy storage growth, and potential new models. Some market watchers have also pointed to broader enthusiasm for AI-linked companies as a factor lifting Tesla’s valuation.
Still, skeptics warn that the divergence between stock performance and vehicle sales could pose risks if demand does not recover. With U.S. EV adoption slowing and global competition intensifying, Tesla’s ability to reignite sales growth remains a key question heading into 2026.
Tesla rolls out aggressive incentives to avert second straight annual sales decline
