How Tesla stock has more than doubled to a fresh record high after a brutal bear market

• Tesla stock has climbed 121% from its April low, hitting a new all-time high this week.
• Shares had plunged more than 50% from their peak as investors fretted over tariffs and Musk's politics.
• Key drivers of the rally include US-China trade news, Musk's recent stock purchase, and his new pay package.

Tesla stock has mounted a stunning comeback in the latter half of this year.

Shares of Elon Musk's carmaker have erased their losses after plummeting earlier in 2025, and, as of this week, have clawed their way back to all-time highs.

Tesla closed at a record $489.88 a share on Tuesday. The stock is up 121% from its low in early April. Shares are up 26% for the year as of Wednesday morning, putting the company in the upper echelon of Magnificent Seven stocks.

The rally in recent months marks a remarkable turnaround for the stock, which has been battered in volatile trading and mired in a bear market for much of the first half of the year. Shares of the EV company had plunged more than 50% from their peak in December 2024 to their trough in April, driven largely by declining Tesla sales, concerns about tariffs, and CEO Elon Musk's presence on Capitol Hill.

It's rally this week to all-time highs came as Musk gave a bullish update on Tesla's robotaxi rollout in Austin. Investors have pinned a lot of hopes on self-driving tech amid this year's dip in car sales. Along with its robotics initiatives, markets see Tesla's non-auto business as the primary bullish catalyst heading into 2026.

A general risk on mood amid rate cuts and more optimistic forecasts for stocks next year has also helped spur the latest leg of Tesla's comeback.

Here's what has driven the stock's blistering rally in the last several months.

April: Elon Musk says he'll step back from DOGE

Musk said he would step back from the Department of Government Efficiency on Tesla's first-quarter earnings call. The news sparked relief among investors, who have long complained that the CEO may be too distracted by his sprawling empire of companies and his political ambitions to focus on Tesla.

Shares rose nearly 20% after Musk made the announcement through the end of the week.

May: US-China tariffs are first reduced

The US struck its first trade truce with China in May, with both sides agreeing to slash their respective tariff rates for a period of 90 days.

The agreement temporarily removed a key headwind for Tesla, which sources its supplies heavily from China. The nation also makes up a key market for Tesla's vehicles.

Tesla shares rose alongside the broader market, climbing nearly 9% after the announcement through the end of the week.

Since then, other positive developments between the US and China have also helped give Tesla a boost:

• June: The US and China agree to a framework trade deal.
• August: The US and China extend their trade truce for another 90 days.
• October: The US and China reach another trade deal framework.

June: Musk makes up with Donald Trump

Elon Musk appeared to mend his relationship with President Donald Trump after the two billionaires publicly feuded over Musk's opposition to the Republicans' tax and spending bill.

In the heat of their argument, the White House said Trump was considering selling or giving away the Tesla he purchased earlier in the year. The president also threatened to yank contracts the government struck with Elon Musk's companies.

"I regret some of my posts about President @realDonaldTrump last week. They went too far," Musk wrote in a post on X on June 11.

Speaking to the New York Post in an interview the same day, Trump said he thought the gesture from Musk was "very nice."

Tesla shares rose 6% through the end of the week.

September: Tesla introduces a $1 trillion pay package for Musk with ambitious targets

Tesla rolled out a new pay package for Musk after a Delaware Court struck down a previous $56 billion package.

Shares rose 12% in the week following the announcement on September 5.

The new package, from which Musk can earn up to $1 trillion, was approved by shareholders in November and comes attached with aggressive targets. For Musk to earn his massive payout, he must boost the company's market cap to $8.5 trillion by 2035, sell 12 million cars a year, and deploy one million robotaxis and one million humanoid robots.

September: Musk purchases $1 billion worth of Tesla stock

On September 12, Musk purchased $1 billion worth of Tesla stock, according to a securities filing released the following Monday. The purchase boosted Musk's ownership of the company from around 13% to 15%.

Investors are looking at the purchase as a sign of commitment from Musk, who has been accused of neglecting his duties at Tesla since he first sought to acquire Twitter in 2022.

Tesla shares rose another 3% through the end of the week.