Tesla's stock (TSLA) rebounded on Friday, closing up 3.5% at $411.11, helping to offset a brutal week for technology stocks that saw the Nasdaq Composite fall nearly 4% through Thursday. The broader market also advanced, with the S&P 500 gaining 2% and the Dow Jones Industrial Average climbing 2.5%. Despite Friday's rally, Tesla shares still dropped 4% for the week, having fallen in 12 of the past 17 trading sessions.
The week's losses were driven by a broader tech selloff, with Alphabet declining after earnings and Amazon tumbling following its results. Software stocks also slid on fears that artificial intelligence is disrupting traditional business models. No specific Tesla news or analyst upgrades drove Friday's gain, suggesting it was a technical rebound from oversold conditions.
In a major strategic shift, Tesla announced it is discontinuing production of its Model S and Model X vehicles entirely. The company plans to retool those factories not for new electric vehicle models, but to manufacture humanoid robots. This move transforms Tesla from a pure car company into a robotics enterprise, with CEO Elon Musk believing robots could become a massive future business. The transition is expected to take several years to fully materialize.
Separately, data from China offered mixed signals. Tesla's January deliveries from its Shanghai Gigafactory rose 9% year-on-year to 69,129 units, placing it third among major EV manufacturers in China behind BYD (205,518 shipments) and Geely (124,252 units). However, analysts noted this did little to change the broader demand picture, with total sales of Tesla's China-produced vehicles falling 4.8% in 2025.
Tesla continues to face intense competition and pricing pressure in China, where its base Model 3 sedan is priced at around 235,500 yuan ($33,943)—nearly three times the cost of BYD's base Seal model. To maintain competitiveness, Tesla is offering five-year zero-interest loans and seven-year "ultra-low" interest rate loans for orders placed before February 28.
In other developments, Congress held hearings on autonomous vehicle standards with representatives from Tesla and Alphabet's Waymo testifying about self-driving technology rollout. Tesla launched its robo-taxi service in Austin, Texas in June 2025 and plans to expand to nine cities by mid-2026.
Tesla's valuation reflects these ambitious bets, trading at a P/E ratio of 390—dramatically higher than traditional automakers, the S&P 500's P/E of 28, and even Tesla's own five-year average P/E of 98.
