In a volatile stock market, the Tesla (NASDAQ:TSLA) share price continues to stand out from the crowd. Shares in Elon Musk’s company are down 31% since the start of the year, while the S&P 50‘s down less than 2%.

The share price might be falling, but I don’t think the company’s in a worse position than it was at the start of the year. And not just because of the energy business.

Car sales

Car sales probably have something to do with why the stock has been coming down. In February, vehicle deliveries were down 76% in Germany and 50% in China. That’s not positive and it’s had to attribute this to a wider slowdown in the industry. Electric vehicle (EV) sales in Germany were up 40% in January, despite Tesla seeing a major decline there.

From my perspective however, this isn’t a reason for the shares to be falling so sharply. It’s been a long time since car sales were a viable investment thesis for the business.

Tesla has a market-cap that’s more than four times that of Ford, General Motors, Stellantis, and Ferrari combined. Selling enough cars to justify that was always going to be difficult.

Elon

Another source of concern is the company’s CEO. As a result of his role in the Department of Government Efficiency (DOGE), Musk’s reported to have become disengaged from Tesla. I find this hard to believe. One reason is the fact a lot of the CEO’s personal wealth is tied up in Tesla shares, giving him a strong interest in the company – and its share price.

Another is that overseeing the National Highway Traffic Safety Administration is within DOGE’s remit. And Musk has historically viewed the organisation as an obstacle to Tesla’s progress.

I’m sceptical of the idea that involvement in DOGE automatically comes at the cost of keeping Tesla’s interests at heart.  

What matters for Tesla?

As I see it, the investment thesis for Tesla shares comes down to its ability to launch its robotaxi network. Without this, I don’t see how the stock can be a viable investment. This is a view that Musk has endorsed in the past and I think it’s still the case. But the main obstacle to this isn’t car sales – it’s regulation.

Despite the CEO’s comments earlier in the year, I don’t think it would be a big problem if the robotaxi network doesn’t launch in August. What matters is that it gets there eventually. 

I don’t think the odds of Tesla getting regulatory approval for its autonomous vehicle network have become dramatically longer. So I’m keeping an eye on the share price as it falls.

Patience

Tesla shares might be down 31% in the last couple of months. But a look at where the stock was five years ago (53% lower) goes some way towards putting this in context.

The share price is falling, but I don’t think the underlying business is deteriorating. It’s not yet too cheap for me to ignore, but the equation looks ever more favourable as things continue.