Tesla Stock Soars. Interest Rates Are What Really Matter.

A Tesla Cybertruck drives outside the newly opened Tesla Diner in Los Angeles. (Mario Tama/Getty Images)

Tesla stock soared Friday, along with most of the market, after Fed chair Jerome Powell spoke in Jackson Hole, Wyo.

His speech overwhelmed everything, including a new pricing strategy from the EV maker, which has spent the past few years slashing prices in a bid to improve affordability and outsell its rivals.

The “Cyberbeast” version of the Cybertruck is getting more expensive. It’s another sign of how Tesla feels about the future of the EV and car businesses.

Shares were up in early trading. Then came Powell’s speech, where he noted weakening labor-market conditions, paving the way for a September interest-rate cut. The stock soared, gaining 6.2% to close at $340.01. The S&P 500 and Dow Jones Industrial Average rose 1.5% and 1.9%, respectively. For the week, the stock rose 2.9%.

Lower rates help many businesses, including car makers. Rate cuts make financing vehicle purchases more affordable.

As for the truck, Tesla raised the price of the high-end version of the Cybertruck to $114,990 from $99,990 in the U.S., according to listings on its website. The truck now has a “Luxe Package,” which includes Full-Self Driving, or FSD, four-year wheel and tire protection, and free supercharging access.

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Essentially, Tesla is bundling its highest-level driver-assistance product into the purchase price. With other Tesla models, customers can pay a one-time fee of $8,000, or $99 a month, for FSD. The $8,000 fee isn’t equivalent to the $15,000 price increase, but free charging is attractive, too.

The two other Cybertruck options still start at $62,490 and $72,450, respectively, and don’t come with the Luxe package.

Investors surely noted the price change, but the market, not the Cybertruck news, caused the stock to jump. Pricing decisions on a single trim don’t typically move car stocks.

Still, the Luxe package might be a test for the company as it tries to improve the uptake of Tesla’s Full-Self Driving software. If the bundle option is successful, Tesla buyers might see it on higher-end versions of other Tesla models.

Tesla, lately, has been laser-focused on self-driving technology. It launched a self-driving taxi service in Austin, Texas, on June 22. And CEO Elon Musk recently pointed out that a Model Y configuration just offered in China might never be sold in the U.S. if self-driving technology advances fast enough.

The autonomous-driving focus arguably has affected car sales. A promised lower-priced model designed to help arrest sales declines hasn’t arrived, and it looks as if it will be a lower-end Model Y trim.

Tesla sales in the first half of 2025 fell about 13% year over year globally. Despite the drop, Tesla stock was up more than 50% over the past 12 months. Investors, it seems, are also focused on the potential for self-driving technology to drive a new era of earnings growth.

As for Cybertruck, sales have slowed. The company doesn’t release data on sales by model, but data provider Cox Automotive reported second-quarter Cybertruck sales of 4,306 units, down 51% year over year, and below the 5,842 F-150 Lighting electric pickup trucks Ford sold in the quarter.

The Cybertruck only accounts for 1% or 2% of total Tesla sales. The highest-level trim only accounts for a portion of Cybertruck sales. Testing a new Luxe package won’t have much impact on the bottom line.

But it does show the direction of the company. Musk wants more self-driving cars.

Write to George Glover at george.glover@dowjones.com and Al Root at allen.root@dowjones.com