Tesla Stock Rises Then Falls. How It Can Reach Escape Velocity.

Coming into Tuesday trading, Tesla stock was down about 14% year to date, but up about 60% over the past 12 months. (Photo by DOMINIC GWINN/Middle East Images/AFP via Getty Images)

Tesla stock wobbled on Tuesday as investors awaited more news on robo-taxis.

Shares of the electric vehicle maker traded as high as $350.77 during the session before sliding back. Ultimately they eked out a 0.2% gain and closed at $346.97, while the S&P 500 and Dow Jones Industrial Average rose 0.3% and 0.4%, respectively.

There isn’t much to pin Tuesday’s moves on. Tesla stock rose 3.6% on Friday after Tesla’s 2025 proxy statement outlined plans to award CEO Elon Musk some 425 million incentive-laden stock options, equivalent to about 12% of Tesla’s stock outstanding. That would be worth roughly $1 trillion to Musk if he hits all of his incentives, which include Tesla generating $400 billion in annual earnings before interest, taxes, depreciation, and amortization, or Ebitda.

It’s an unprecedented pay package, but investors want Musk running their company. Still, shares dropped 1.3% on Monday, giving back some of Friday’s gain. Tesla stock has had trouble maintaining momentum in recent weeks. Shares had risen seven times and fallen seven times in the 14 weeks heading into Monday trading.

With Musk’s motivation assured, investors can turn their attention to Tesla’s robo-taxi business, launched in June in Austin, Texas. Musk said in July that Tesla robo-taxis could be available to half the U.S. population by the end of the year. So far, the service is only operating in Austin with a safety monitor in the front passenger seat. Additional cities could be a catalyst for the stock, which is currently valued at about $1.1 trillion.

Coming into Tuesday trading, Tesla stock was down about 14% year to date, but up about 60% over the past 12 months.

Despite the moves up and down, Tesla stock has been stuck in something of a range. Over the past four months, shares haven’t been able to close much above $360 on the upside or below $280.

And we’re still waiting for a catalyst to break that range.

Write to Al Root at allen.root@dowjones.com