Tesla Stock Faces Weekly Dip, But Musk’s New AI Boast And China Model Y Refresh Lift Retail Spirits

Tesla Inc.’s stock is headed for a weekly finish in the red, with broader market weakness, profit-taking, and a regulatory probe into its “Actually Smart Summon” driverless feature weighing on the EV maker’s shares. 

The dip came alongside fading hopes of an interest rate cut after stronger-than-expected U.S. economic data. 

Despite these setbacks, retail sentiment on Stocktwits turned ‘bullish’ by Friday morning, reflecting renewed investor optimism.

TSLA sentiment meter Jan 10 as of 9:30 am ET | source: Stocktwits

Key factors driving this shift in sentiment include Tesla’s announcement of a refreshed Model Y in China, amidst rising competition from local EV makers. 

The updated Model Y, priced at 263,500 Chinese yuan ($35,935), marks a 5.4% price increase from the previous version, according to CNBC. 

Deliveries are set to begin in March, though the refresh is currently only available in China. 

The new unveiling follows Tesla’s first-ever annual decline in overall deliveries for 2024.

Additionally, CEO Elon Musk’s remarks at the Consumer Electronics Show (CES) in Las Vegas on Wednesday evening have also fueled some retail enthusiasm. 

Musk discussed the enormous potential of AI, stating that its Optimus humanoid robots could become the “biggest product ever in history by far,” suggesting that Tesla could produce up to 500,000 units by 2027, Barron’s reported. 

"I think most people, if not everyone, would probably like to have their own personal C-3PO or R2-D2,” he reportedly said.

Investors on Stocktwits reacted positively to Musk’s vision, with one user predicting that the projections could add at least $200 billion to Tesla’s market cap.

Tesla’s foray into AI extends to its self-driving technology, which it plans to leverage for its robotaxi service aimed for launch by the end of this year. 

Heading into Friday, the company was contending with some negative news. The National Highway Traffic Safety Administration (NHTSA) announced a recall of 239,382 Tesla vehicles over a rearview camera issue — impacting 2024-2025 Models 3, S, X, and Y. 

The recall is related to a reverse current short circuit that disables the rearview camera, increasing collision risks, the NHTSA said.

Tesla’s stock gained 64% in 2024, and has risen a modest 1% so far this year.

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