Tesla Inc. (TSLA) pulled back Wednesday after a Tuesday trip to all-time highs, because apparently even rocket ships need to refuel occasionally.
The Good News: Nobody's Driving
The rally into Tuesday's close was fueled by growing enthusiasm around Tesla's autonomous ambitions. CEO Elon Musk dropped a casual bombshell this week: Tesla is now testing robotaxis in Austin with literally nobody inside. Not even a safety monitor nervously gripping the door handle.
The company kicked off its robotaxi platform in June using modified Model Y vehicles equipped with Full Self-Driving technology and a human safety monitor riding shotgun. By the weekend, Musk was posting on X that the cars are cruising around "with no occupants in the car." Just empty vehicles doing their thing, which is either the future or a decent setup for a sci-fi thriller.
The $3 Trillion Dream
Wedbush analyst Dan Ives, one of Tesla's most vocal bulls, thinks 2026 is shaping up to be a "monster year" for the company. He's pointing to progress in autonomy and robotics as key catalysts, projecting Tesla could reach a $2 trillion market cap by 2026. His bull case? Try $3 trillion. Ives maintains an Outperform rating with a street-high price target of $600.
He's also excited about potential spillover benefits from SpaceX, which reportedly could go public next year at a $1.5 trillion valuation. Ives sees the broader AI revolution as still in the early innings of an eight-to-ten-year buildout.
The Bad News: California Isn't Impressed
Here's where things get messy. A California judge ruled late Tuesday that Tesla engaged in "deceptive marketing" around its Autopilot and Full Self-Driving systems. The court didn't mince words, calling the term "Full Self-Driving" itself "unambiguously false and counterfactual." Ouch.
The ruling ordered a 30-day suspension of Tesla's license to sell and produce cars in California. The California DMV later clarified that Tesla has 60 days to address the issues before any suspension kicks in. Tesla fired back quickly, stating that "sales in California will continue uninterrupted."
Where Things Stand
Tesla shares were down 4.62% at $467.23 Wednesday, still hovering near the stock's 52-week high of $495.28. Not exactly a meltdown, but enough to remind investors that regulatory speed bumps are part of the autonomous driving journey.