Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in TSLA.

Tesla, Inc. (NASDAQ: TSLA) isn’t just a stock — it’s a sentiment barometer, a political lightning rod, and a proxy for innovation. In 2025, the company sits at a precarious intersection of politics, competition, and unmet expectations, all of which are fueling daily volatility in its stock.

For active traders seeking to capitalize on Tesla’s fast-moving storylines, Direxion’s Daily TSLA Bull 2X Shares (Ticker: TSLL) and Daily TSLA Bear 1X Shares (Ticker: TSLS) offer powerful tools to capture short-term upside or downside moves in one of the market’s most watched names.

Here are the major catalysts driving Tesla price action now — and what traders should be watching in the days and weeks ahead:

Political Optics: Will Musk Distance Himself from Washington?

Elon Musk’s role as Senior Advisor to President Trump and head of the controversial Department of Government Efficiency (DOGE) has proven toxic for Tesla’s brand, sparking vandalism of Tesla vehicles and broader consumer backlash. In March, the FBI launched a task force in response to a string of politically motivated attacks on Tesla property.

But Musk is stepping away from DOGE to refocus on Tesla operations, which has lifted the stock from recent lows.

Short-term trading event: Any change in Musk's exit from or affiliation with DOGE would be a headline catalyst — bullish or bearish depending on the move.

Also watch: Any policy announcements by DOGE that suggest regulatory overreach or mission creep — these could ignite activist pressure or boardroom volatility*.

EV Market Share Wars: BYD and Xiaomi Take Aim

Tesla is no longer the undisputed king of EVs. In Q1 2025, Tesla reported a 16% YoY drop in production and 13% drop in deliveries, falling well short of analyst expectations. Meanwhile, BYD and now Xiaomi are gaining momentum.

• BYD’s 2024 revenue hit $107B on 4.27M deliveries, crushing Tesla’s $97.7B on 1.79M.

• BYD’s new ultra-fast charger (250 miles in 5 minutes) is outpacing Tesla’s Superchargers.

• Xiaomi’s YU7 SUV launch — a direct challenger to the Model Y — is imminent in China.

Short-term trading event: BYD’s U.S. market entry chatter, Xiaomi YU7 reviews, or surprise Tesla production slowdowns could move TSLA fast.

Watch for next month’s global EV registration data — it could shift investor sentiment overnight.

Institutional Doubt: Are the Big Funds Losing Patience?

Almost 49% of Tesla shares are held by institutions, and recently, high-profile investor Ross Gerber sold 10% of his Tesla stake, citing disillusionment with Musk’s leadership and stagnating progress on key projects like robotaxis.

Tesla has teased autonomous vehicle launches for years but still hasn’t tested Full Self-Driving (FSD) without a safety driver — even as its launch window closes.

Short-term trading event: Any delays to the robotaxi rollout — or new executive resignations — could drive a wave of selling from funds already on edge.

Watch for social sentiment shifts and fund flow data. Retail may be next to exit if institutions break ranks further.

Surprise Tech Drops and Partnership News

Despite the noise, Tesla still has the capacity to swing markets with a single tweet. Recently, the company launched a long-range Cybertruck trim, and offered free FSD transfers for U.S. customers — a potential way to jolt lagging delivery numbers.

Short-term trading event: Battery tech announcements, unexpected software upgrades, or new Gigafactory partner deals could ignite rallies in TSLA — or disappoint if details underwhelm.

Rumors of next-gen 4680 battery enhancements or licensing deals could spark a short squeeze or gap-up moves.

Earnings, Margins, and Robotaxi Hype Check

Tesla’s next earnings report, expected in late July, will be a referendum on:

• Whether FSD and Robotaxi promises are finally taking shape

• Margin pressure from increased discounting in China and Europe

• Whether Cybertruck production is scaling fast enough to meet demand

Short-term trading event: Earnings, FSD progress reports, and delivery guidance updates could cause big overnight moves in TSLA.

A beat on margins or FSD expansion could cause a rally. A miss or delay likely favors a pullback.

Trade Tesla’s Volatility With Tactical Precision

With so many short-term trading opportunities, TSLA remains a prime candidate for tactical strategies using leveraged single-stock ETFs:

• TSLL: Bullish traders can target 2X daily exposure, before fees & expenses, to Tesla’s daily price movements.

• TSLS: Bearish traders can seek 1X daily inverse exposure, before fees & expenses, to Tesla’s daily performance.

These ETFs are not for long-term holding. They’re designed for traders who can react quickly to the constant stream of news, sentiment shifts, and earnings beats — or flops.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

The Fund has derived all disclosures contained in this document regarding Tesla, Inc. from publicly available documents. In connection with the offering of the Fund’s securities, neither the Fund, the Trust, nor the Adviser or any of its respective affiliates has participated in the preparation of such documents. Neither the Fund, the Trust nor the Adviser or any of its respective affiliates makes any representation that such publicly available documents or any other publicly available information regarding Tesla, Inc. is accurate or complete. Furthermore, the Fund cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of Tesla, Inc. have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning Tesla, Inc. could affect the value of the Fund’s investments with respect to Tesla, Inc.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with TSLA and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with TSLA and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to TSLA is impacted by TSLA’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to TSLA at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to TSLA increases on days when TSLA is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with TSLA and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to TSLA is impacted by TSLA’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to TSLA at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to TSLA increases on days when TSLA is volatile near the close of the trading day.

Tesla, Inc. Investing Risk — Tesla, Inc. faces risks associated with future growth and success of consumers’ demand for electric vehicles; increasing competition; variability in the market for electric vehicles; potential delays in developing and launching new products; mismatches between supply and demand for the products; charging networks may be difficult to establish; product liability claims; cyberattacks; financial costs; system security and data breeches; as well as the risks related to the fact that communications from Mr. Musk to the public may significantly impact the trading price of TSLA.

Consumer Discretionary Sector Risk — Companies in the consumer discretionary sector are tied closely to the performance of the overall domestic and international economy, including the functioning of the global supply chain, interest rates, competition and consumer confidence.

Automotive Companies Risk — The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. Automotive companies can be significantly affected by labor relations, fluctuating component prices and supplier disruptions.

Automotive Companies Risk — The automotive industry can be highly cyclical, and companies in the industry may suffer periodic operating losses. Automotive companies can be significantly affected by labor relations, fluctuating component prices and supplier disruptions.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily TSLA Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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