3 things that defined a bizarre 2025 for Elon Musk and Co.
If you’re a Tesla (TSLA) investor, tranquility and low beta aren’t exactly the norm. It’s usually more of a roller coaster of stock moves, as was the case in 2025, with swings and a gigantic peak to trough.
Yet the stock hit a record high on Wednesday, fueled by the latest in its self-driving exploits, and is poised to beat the benchmark S&P 500 (^GSPC), Santa Claus rally notwithstanding.
There was no shortage of news that tossed the stock around like a rag doll, but here are three of the biggest events of the year for Tesla and CEO Elon Musk.
President Trump listens as Elon Musk speaks in the Oval Office at the White House on Feb. 11, 2025, in Washington, D.C. (AP Photo/Alex Brandon, File) ·ASSOCIATED PRESS
It was dubbed a bromance in the White House.
Musk’s backing of President Trump’s reelection campaign in the summer of 2024, for which Musk personally spent over $100 million, meant the two were connected in more ways than just ideology.
Musk was given almost exclusive access to Trump at the White House and Mar-a-Lago. Trump rewarded Musk’s loyalty by making him the head of the so-called DOGE, or Department of Government Efficiency initiative.
But things soon unraveled.
Musk went after Trump’s signature “One Big Beautiful” spending bill, claiming it was big on pork spending. But more importantly to Tesla, the bill removed the federal EV and emissions tax credits that Tesla collected, which were worth billions.
Musk’s strong critiques of the bill led to a massive falling out with Trump, with Tesla and Musk’s other businesses, like SpaceX (SPAX.PVT), caught in the crosshairs.
The battle between the two was too much for even Tesla bulls and investors, who saw the stock get pummeled.
“Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take,” Wedbush analyst Dan Ives wrote earlier this summer.
Trump also responded to a feature of the bill that Musk privately groused over.
“It is a Great Bill but, unfortunately for Elon, it eliminates the ridiculous Electric Vehicle (EV) Mandate, which would have forced everyone to buy an Electric Car in a short period of time,” Trump said on Truth Social. “I have been strongly opposed to that from the very beginning.”
Musk threatened to start a third political party, to which Trump responded angrily. Eventually, the two reached a detente, with Musk’s handpicked NASA administrator nominee, Jared Isaacman, being renominated, which pacified Musk for the moment.
The problem is that no one knows when the angry Musk will return to politics.
Elon Musk speaks at the 2025 Tesla general meeting, where shareholders approved his unprecedented $1 trillion pay package. ·Tesla.com
Stop me if you heard this one before: Musk and Tesla’s board drumming up support to get Musk paid with what many call an exorbitant package? Sound familiar? Because it happened last year too.
In early November, shareholders approved Musk’s new pay package — one that could reach $1 trillion in overall compensation. Tesla said Musk’s package passed with over 75% approval.
“I’d like to give a heartfelt thanks to everyone who supported the shareholder votes,” Musk said at Tesla’s shareholder meeting. “I super appreciate it.”
Musk added: “What we’re about to embark upon is not merely a new chapter of the future of Tesla but a whole new book.”
Big funds, such as the Norwegian sovereign wealth fund and California’s CALPERS, came out strongly against the pay package. But a new Texas domicile made it easier for Musk to vote his own shares in the process of approving his pay package, which sealed the deal.
The operational milestones are achievements that include delivering Tesla’s 20 millionth vehicle, having 1 million robotaxis in use, or selling 1 million Optimus robots. Tesla’s EBITDA would also have to eventually reach $400 billion (Tesla earned $16.6 billion in total last year) as part of the operational milestones.
Ultimately, to receive the full award, Tesla, with Musk at the helm, would need to achieve a market capitalization of $8.5 trillion, in addition to meeting all operational milestones. Tesla’s market cap at the moment stands at around $1.5 trillion.
Musk has his work cut out for him, but the board gave him a little wiggle room.
Independent proxy adviser Glass Lewis, which urged shareholders to reject the package, argued that the pay package includes broad discretion for the board to approve dispersal of some tranches of stock, even if Musk does not hit the metrics.
A Tesla robotaxi drives on the street in Austin, Texas, on June 22, 2025. (Reuters/Joel Angel Juarez) ·REUTERS / Reuters
Sci-fi legend Philip K. Dick wrote the novel “Do Androids Dream of Electric Sheep?” which served as the basis for “Blade Runner,” a movie Musk has fawned over due to its cyberpunk themes and portrayal of a future of robots among us.
It’s pretty clear Musk has been dreaming of a robotaxi future for quite some time, and it may be becoming a reality.
The first step in making it a reality came with Tesla’s pilot robotaxi program in Austin, Texas, where Model Ys running the latest version of Tesla’s full self-driving (FSD) software pilot riders around town, summoned by Tesla’s bespoke Robotaxi app.
Though the service had some hiccups and relies on a safety driver riding along, the service has expanded steadily and now has robotaxis testing in the San Francisco Bay Area.
On Dec. 14, Musk confirmed that Tesla started testing its robotaxi service in Austin without a safety driver.
While the ramp-up has been slow, Tesla bulls on Wall Street are encouraged.
The login screen of Tesla’s Robotaxi app is displayed on an iPhone. (Andrej Sokolow/picture alliance via Getty Images) ·picture alliance via Getty Images
“Heading into 2026 this marks a monster year ahead for Tesla and Musk as the autonomous and robotics chapter begins,” Wedbush’s Ives wrote in a note the next day. “In our view we expect an accelerated Robotaxi launch across the US with importantly volume production of Cybercabs starting in the April/May timeframe.”
The new year is gearing up to be a big one for autonomous driving and robotaxis, with Morgan Stanley analysts predicting 2026 will be an “inflection point” for the technology.
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business. We believe that its leading-edge personal autonomous driving offering is a real game changer, and remains a significant competitive advantage over its EV and non-EV peers,” Morgan Stanley’s Andrew Percoco wrote in a note in early December.
Musk also reiterated his forecast that Tesla’s robotaxis in Austin would be entirely driverless by the end of the year.
Per the Austin American-Statesman, Musk said during an event at xAI that Tesla’s Model Y robotaxi fleet will be fully autonomous in about three weeks.
“I think it’s pretty much a solved problem; we’re just going through validation right now,” Musk added.
Dreams of a robotaxi future are nearly here, and Tesla shareholders hope Musk can make good on his prophecy.
“The march to an AI driven valuation for TSLA over the next 6-9 months has now begun in our view with FSD and autonomous penetration of Tesla’s installed base and the acceleration of Cybercab in the US representing the golden goose for Musk & Co.,” Ives said.
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Correction: A previous version of this article misspelled the name of analyst Andrew Percoco. We regret the error.
Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.
