Dutch Courage: FSD Crosses the Atlantic

Tesla has finally secured its first regulatory foothold in Europe. The RDW, the Netherlands' vehicle authority, officially approved Tesla’s Full Self-Driving (FSD) Supervised after more than 18 months of rigorous testing on public roads and private tracks The Verge. The approval allows Tesla to begin rolling out FSD version 2026.3.6 to Dutch owners, provided they complete a mandatory tutorial and safety quiz Engadget.

This is a strategic win for Austin. By establishing a baseline in the Netherlands—where Tesla’s European headquarters is located—the company is positioning itself for a broader rollout across the European Union Automotive News. Regulators noted that the system’s continuous driver monitoring makes it a "positive contribution" to road safety compared to less advanced assistance tools The Verge. However, the RDW was clear: this is not full autonomy, and drivers must remain in control at all times Engadget.

The 50,000-Vehicle Hangover

Tesla’s Q1 2026 numbers are in, and they tell a story of mismatched expectations. The company produced 408,386 vehicles but only delivered 358,023 CleanTechnica. This 50,363-unit gap represents the largest inventory surplus in Tesla's history, signaling that the days of demand far outstripping supply are firmly in the rearview mirror CleanTechnica.

Analysts are watching this backlog closely, as it suggests Tesla is maintaining high production levels despite cooling consumer appetite. For context, the previous record surplus occurred in Q1 2024 with 46,561 units, but Tesla was selling more cars overall during that period CleanTechnica. While some of this inventory is likely tied up in transit, the widening delta puts pressure on Tesla to either cut prices further or significantly scale back production lines that are already running below maximum capacity CleanTechnica.

The Model 2 Resurrection

After months of speculation that the $25,000 "Model 2" was dead, the project has reportedly risen from the ashes Forbes. Elon Musk is pivoting back to the affordable segment as competitors begin to crowd the entry-level EV space Yahoo Finance. The move is likely a direct response to the Kia EV2, which recently began production in Slovakia specifically to target the European compact market CleanTechnica.

Tesla isn't just fighting legacy automakers; new startups are coming for the budget crown. Slate Auto, a secretive startup backed by Jeff Bezos, recently unveiled a customizable electric pickup with a target price of $25,000 TechCrunch. Slate has already secured over 100,000 reservations, proving that the appetite for sub-$30k EVs is massive Bitget. For Tesla to maintain its market share, the un-canceling of the Model 2 isn't just a choice—it's a necessity The Verge.

Market Watch

Markets are closed for the weekend. TSLA closed Friday at $348.95, marking a gain of 0.96% for the session. The broader market saw the S&P 500 climb 3.6% over the week to end at 6,816.89 TKer.

As Q1 earnings season kicks off, Citi has identified Tesla as one of 16 stocks primed for a post-earnings "pop," with analysts forecasting potential price increases between 3% and 12% following the announcement Business Insider. Despite the inventory concerns, Citi maintains a "Buy" rating on the stock, betting on high-conviction growth relative to Wall Street consensus Business Insider.