Tesla’s stock has regained some ground in recent weeks, rising 4.2% on Friday to close at $248.70, as the electric vehicle maker reported stronger-than-anticipated second-quarter delivery numbers. The improvement, driven by higher output at its Berlin and Texas gigafactories, has prompted a fresh wave of debate among analysts about whether the company’s core auto business is finally stabilising after a turbulent 2025.
For UK investors, the question matters because Tesla remains a heavyweight in many global equity funds and passive trackers. The stock’s 35% decline from its 2024 peak had weighed on the performance of popular accumulation funds, particularly those with exposure to the US tech and consumer cyclical sectors. The FTSE 100, by contrast, has been relatively insulated, but UK pension funds with international mandates have felt the drag.
“The delivery numbers are a welcome sign, but they don’t change the structural challenges Tesla faces,” said Mark Henderson, equity analyst at London-based Cavendish Asset Management. “Margins are under pressure from price cuts, and competition from Chinese manufacturers like BYD is intensifying. The improved auto business is a positive, but it’s not a game-changer on its own.”
From a sector perspective, the broader automotive industry in Europe remains under strain, with supply chain costs still elevated and demand for EVs softening in some markets. Tesla’s ability to maintain its premium pricing — and therefore its industry-leading margins — will be crucial. The company’s energy storage division, meanwhile, has shown stronger growth, but it remains a smaller part of overall revenue.
For UK pension holders, the key takeaway is that Tesla’s stock volatility directly affects the value of diversified portfolios. A sustained rally would boost returns for those with heavy US equity exposure, but any renewed weakness could offset gains from more defensive holdings. As always, the advice from financial planners is to focus on long-term asset allocation rather than reacting to quarterly swings.