Ross Gerber, an early Tesla investor and CEO of Gerber Kawasaki Wealth & Investment Management, recently reiterated his pessimistic stance on Tesla, predicting that the company's stock price could face a decline of up to 50% by 2025.
Gerber was among the early investors in Tesla and reaped significant returns when the company's stock prices hit historic highs. However, since last year, his attitude has shifted dramatically from being a staunch supporter of Musk to an outspoken critic.
In August last year, Gerber revealed he had sold approximately $60 million worth of Tesla stock, citing concerns about the waning popularity of Tesla vehicles. He further stated that if Tesla's performance didn't improve within six months, he would liquidate his holdings.
After surging post the 2024 election, Tesla's stock has dropped nearly 11% so far in 2025. Gerber believes this downward trend will continue and has outlined four primary reasons for his bearish view on Tesla:
- Challenges in Achieving Full Self-Driving
Gerber notes that Musk's goal of launching a network of self-driving taxis in Austin, Texas, is overly ambitious and nearly unattainable. He pointed out that Tesla's reliance on cameras rather than using lidar sensors raises safety concerns in meeting the requirements for full autonomy. - Musk is Overburdened with Affairs
Gerber highlights that Musk manages several companies, including Tesla, SpaceX, and xAI, and frequently voices opinions on social media. He believes that Musk's divided attention, particularly his focus on artificial intelligence, could negatively affect Tesla's development. - Slowing Tesla Sales
Although Tesla's self-driving and robotics initiatives are highly talked about, Gerber notes that vehicle sales remain its core business, and this sector's growth has started to slow. He points out that competition from companies like BYD poses a significant threat to Tesla worldwide. - Overvaluation of Tesla
Gerber also mentioned that despite Tesla’s market capitalization being significantly higher than traditional automakers, if Tesla's sales continue to decelerate, its high valuation will face adjustment. He cited that although Tesla's profits are only 20% of Toyota's, its market cap is nearly five times that of Toyota.
Gerber's warnings appear to have some foresight, as the challenges Tesla faces not only come from competitors but also from Musk's personal endeavors and market skepticism regarding its high valuation.
