Tesla expects to boost its sales in Europe once its Full Self-Driving (FSD) system gets the green light from regulators. The company is also navigating regulatory hurdles in China to launch FSD. In spite of global trade issues, Tesla is growing. It is making strides with its robotaxi service, pushing for approvals in U.S. states such as California, Nevada, Arizona, and Florida. Tesla hopes that by the end of the year, autonomous ride-hailing will be available to half of the U.S. population. In Europe, supervised FSD approval in the Netherlands is close. We think the CEO’s recent remarks are shifting the market’s focus from Tesla’s latest production numbers to future growth opportunities, like FSD approvals. This change suggests that traders should prepare for increased volatility in Tesla’s options. We anticipate that stock prices may swing sharply based on regulatory news rather than it being tied to fundamental performance in the short term. The recent tentative approval for FSD in China—possibly linked to a partnership with Baidu for mapping—is a major opportunity. A formal announcement could lead to a significant rise in stock price since China accounts for over 20% of Tesla’s revenue. This presents a good chance to buy near-term call options in hopes of a favorable outcome. While the news from Europe is positive, traders should stay aware that regulatory timelines can be uncertain. The stock price has faced pressure recently after first-quarter deliveries dropped to 386,810 vehicles, falling short of the forecast of about 449,000. This weakness suggests that strategies like bull call spreads could be wise, letting traders profit from a slight increase while limiting potential losses if news is delayed. The robotaxi story will depend on these approvals, and it’s a longer-term plan. Historically, the stock has surged ahead of major announcements, as seen during past “AI Day” events. We recommend keeping an eye on increased call option volume and open interest, as these could signal the start of a speculative, news-driven rally.

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