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Shares of Tesla edged higher in early trading on Friday, extending modest gains after the stock posted its first monthly advance of the year.
However, investor sentiment remained constrained by slow progress in its artificial intelligence initiatives.
The stock was up around 1.22% at $386.69, while the S&P 500 and Dow Jones Industrial Average rose 0.1% and 0.2%, respectively.
Tesla shares rose 2.7% in April, marking their first positive month in 2026.
However, the gains offered limited relief following a prolonged period of weakness.
Coming into Friday’s session, the stock remained down about 15% year-to-date, having declined in 13 of the past 17 weeks.
AI progress remains key concern
Investor focus continues to centre on Tesla’s ambitions in “physical AI,” including robo-taxis and humanoid robots.
Despite high expectations, progress has been slower than anticipated.
Tesla launched its robotaxi service in Austin, Texas, in June with a limited number of vehicles and human safety monitors.
While the service has expanded to, San Francisco, Dallas and Houston, it remains well short of Chief Executive Officer Elon Musk’s stated goal of operating in dozens of cities and covering a significant portion of the US population.
The development of Tesla’s humanoid robot, Optimus, has also lacked visibility.
The company chose not to showcase the latest version in the first quarter, citing competitive concerns.
The slower-than-expected rollout has weighed on sentiment, particularly given Tesla’s valuation, which stands at roughly 180 times expected earnings over the next 12 months.
At the same time, Tesla’s increasing capital expenditure is adding to investor concerns.
The company plans to spend approximately $25 billion on new plants and equipment, up from less than $9 billion in 2025.
Europe sales show signs of recovery
Tesla’s sales performance in Europe has shown improvement, providing some support to its broader outlook.
Registrations, a proxy for sales, rose sharply in April across key markets.
Data showed a 112% increase in France, a 102% rise in Denmark, and a 23% gain in the Netherlands.
The rebound follows two consecutive years of declining sales in the region, including a nearly 27% drop in 2025.
Tesla’s European sales rose almost 45% in the first quarter.
Higher fuel prices following the Iran conflict have boosted interest in electric vehicles, supporting demand across the continent.
The company also benefited from regulatory developments, with a Dutch authority approving its driver-assistance software and notifying the European Commission of plans to seek EU-wide approval.
Despite the recovery, Tesla continues to face intensifying competition from Chinese automakers such as BYD, which have been steadily gaining market share.
Tesla’s product lineup remains limited, with no new mass-market vehicle introduced since the Model Y in 2020, adding to concerns about long-term growth.
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