Record Gas Prices Could Save Tesla

Elon Musk wants Wall St. to look at Tesla (NASDAQ: TSLA | TSLA Price Prediction) as a robotics and AI company. Its Cybercab robotaxi runs on advanced-level AI, so passengers don’t have to rely on drivers at all. Its mainstream cars will eventually have similar capabilities. However, it is in a race with products like Google Waymo. Its Optimus robot is supposed to be so advanced that Elon Musk says there will eventually be an army of them around the world. But one analysis shows it has at least 11 rivals. Lost in the hype is the fact that Tesla is nothing more than a car company today, based on its financial importance.

Tesla finds itself in a boat with a number of other EV companies, in particular, several large ones based in China. The largest of these, BYD, is making inroads in Southeast Asia, South America, and more recently, Europe. In the first half of this year, according to the European Automobile Manufacturers’ Association (ACEA), BYD registrations in the EU were 130,743, up 168%. Tesla’s comparable number was 124,242, up 75%.

The blockage of the Strait of Hormuz may be the best thing that has happened to Tesla in years. Patrick De Haan, head of petroleum analysis at GasBuddy, recently said that, despite a slight drop in oil prices, “By later this week, the national average could reach its highest level ever recorded for this point in the calendar year.” That means about $4.10 for a gallon of regular, on average, nationwide.

Used Teslas are posting extremely strong sales and high transaction prices. iSeeCars reported that EV prices rose 7.2% year over year in June, based on data from over 1.8 million 1- to 5-year-old used cars sold in June 2025 and 2026. Across this universe, Tesla was the big winner. Its Model X had the largest increase in price at 17.5%. Its Model 3 ranked 5th with an increase of 13.5%. Its Model S ranked 7th with an increase of 13.1%.

Tesla’s challenge is whether its new car sales can have a significant pickup. The numbers it posted in the second quarter were not bad. Model 3 and Model Y production increased 12% to 442,936. Deliveries of the same models rose 25% to 467,762. The proof that Tesla is an EV company is that EV revenue was 72% of the total of $28.2 billion.

Cox Automotive reported that 50.2% of EVs sold in the second quarter were Teslas. The balance of the market is fractured. No other company had more than 6%.

There is ample evidence that high gas prices increase the interest in EVs. According to Yahoo, “Surging gas prices have more than half of car buyers eyeing EVs and hybrids.”

Tesla’s stock price is down 30% this year while the S&P 500 is up 8%. EV sales may do more than AI and robotics to reverse that slide.

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