NEW YORK, February 19, 2026, 10:07 EST — Regular session
- Tesla shares slipped in early action, underperforming the QQQ ETF, which was down only slightly.
- Tesla sidestepped a temporary license suspension in California after regulators noted the company altered its “Autopilot” marketing in the state.
- A legal battle over California’s emissions waiver has investors on alert, with potential impacts on both regulatory credit markets and demand signals.
Tesla shares lost ground Thursday, falling around 0.9% to $407.44 by mid-morning in New York. The move comes as new regulatory headlines around the company’s self-driving push filter through the market. For comparison, the Invesco QQQ Trust, which tracks the Nasdaq, slipped 0.4%.
Timing is key here. Tesla’s pitch to investors leans hard on its driver-assistance tech—and its big robotaxi ambitions—setting it apart from traditional automakers. That’s left the stock especially reactive to shifts in policy or legal developments.
This week, the headlines zeroed in on two flashpoints: the names Tesla can use for its software, and which rules will define the U.S. EV market. Each hits a revenue segment that, according to investors, delivers fatter margins than just selling cars.
Tesla has sidestepped a 30-day suspension of its dealer and manufacturer licenses in California after dropping the term “Autopilot” from state marketing materials, the Department of Motor Vehicles said. The dispute stretches back to 2022, when the DMV accused Tesla of misleading branding for its driver-assist systems. The regulator soon zeroed in on “Autopilot.” Tesla, for its part, tweaked its “Full Self-Driving” description to clarify that active supervision is still needed. According to the DMV, “Autopilot” helps with highway lane-keeping and speed adjustments, while “Full Self-Driving” manages some city-driving moves like changing lanes and reacting to signals. (Reuters)
Tesla’s troubles with organized labor in Germany escalated again. IG Metall has lodged a criminal complaint accusing the Berlin-area factory manager of spreading false claims and is drafting a lawsuit, alleging interference with union work; Tesla didn’t respond to a request for comment. “Legal disputes are not our preferred form of dispute resolution,” said union official Jan Otto. (Reuters)
Investors kept an eye on another U.S. court battle that could upend the emissions rules driving the regulatory-credit market. A federal judge in Oakland is set to hear the Trump administration’s push to dismiss California’s lawsuit—this one targeting a Republican-backed effort in Congress to revoke the state’s emissions waiver. California’s rules are followed by 11 other states. A win for the administration would threaten revenue streams for Tesla and other EV manufacturers, who rely on selling regulatory credits to automakers needing help to hit emissions goals. “This short-termism is killing us,” said Mike Murphy, an ex-GOP strategist and co-founder of EVs for All America. Van Ness Feldman attorney Paul Libus described the policy whiplash as “unprecedented.” (Reuters)
Even so, traders warned not to put too much weight on a modest early shift in a stock like Tesla, which tends to amplify swings in market risk appetite. The company is vulnerable, too, if investors start pulling back from pricey growth shares when rates or policy news rattle nerves.
The risks aren’t hidden: tighter rules around marketing and rolling out driver-assistance tech could drag on adoption. If the court chips away at California’s EV mandate, credit pricing could take a hit, and demand projections get even trickier. Over in Germany, labor strife threatens to pile on more headaches for the company’s efforts to keep production on track.
Next up for investors: the Oakland hearing. Any hint that regulators might go past scrutinizing marketing talk and push for stricter day-to-day rules—that’s the focus now. Tesla’s stock can react sharply to changes in legal or policy boundaries, often more than it does to the usual run of vehicle news.
