Record Gas Prices Could Save Tesla
Tesla's stock has cratered 30% this year while rivals like BYD eat into its European market share, but an unexpected geopolitical crisis may be handing the company a lifeline that no amount of AI hype ever could.
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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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
