Tesla's stock is currently facing significant challenges, with predictions from analysts indicating it could drop by as much as 50% this year. This warning, articulated by Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, follows concerning trends from the electric vehicle market. The downturn arises from multiple factors, including skepticism about the carmaker's full self-driving (FSD) technology and the increasing strength of global competitors.
On February 24, 2025, Gerber discussed these issues during an interview with Business Insider, outlining four primary reasons for his bearish outlook on Tesla’s stock. Firstly, he indicated technological doubts related to FSD capabilities, stating, "Musk aims to introduce driverless taxis by June, but this seems almost impossible at this stage." He pointed out concerns about relying solely on camera-based systems, asserting, "For true autonomy, LiDAR technology is necessary; hence, Tesla’s current setup has inevitable technical limitations."
Gerber also highlighted what he referred to as the "owner risk" posed by Musk's diverse interests across multiple ventures, like SpaceX, xAI, Neuralink, and his social media platform, X. He expressed concern, stating, "Musk is no longer focused on Tesla; instead, his attention seems diverted toward AI. Had he concentrated on self-driving technology early on, the situation could be quite different now."
Another significant factor affecting Tesla is its faltering sales figures. Reports show Tesla's sales fell by over 45% year-on-year last month, alongside its share of the new car registration market dropping from 1.8% to 1%. This reality starkly contrasts with the rising fortunes of competitors like BYD and other Chinese electric vehicle manufacturers, which enjoyed growth during the same period. Gerber noted, "Xi Jinping is strongly backing Chinese electric vehicle firms, effectively favoring them over Tesla."
Compounding these issues, analysts also attribute part of Tesla’s stock challenges to Musk's controversial political involvement, which includes public support for far-right political figures and making derogatory comments about established political leaders. Following these incidents, public sentiments toward Tesla shifted negatively, aligning with critics who argue Musk’s activities have crossed the line.
The shift has had measurable impacts on Tesla's stock value, which recently dropped by approximately 16.77% to settle at $330.53. Despite this decline, individual retailers continue to show significant investment interest. Data from the South Korean Securities Depository shows Tesla ranks as the most held foreign stock, with $20.87 billion (approximately 30 trillion won) stored by domestic investors, highlighting its influential position within their portfolios.
Meanwhile, the Wall Street consensus for Tesla investment appears cautiously optimistic at best, with many analysts opining it’s high time to be wary. Data published by The Wall Street Journal captures the investment climatearound Tesla—while 19 analysts recommend buying, there are also 17 holding opinions and 12 indicating sell recommendations, reflecting divided perspectives on the stock’s potential performance.
Adding to these sentiments, domestic investors, dubbed 'Seohak-gae', have emerged as major stakeholders within Tesla’s market. Notably, they made substantial purchases of Tesla shares earlier this month, accumulating over $6.6 billion by February 24, alongside $5.13 billion invested in the Direxion Tesla 2x ETF (TSLL).
This substantial interest indicates Tesla’s continued allure, amid falling stock values, as investors attempt to view these dips as opportunities rather than threats. Despite the challenges faced on various fronts, celebrities continue endorsing the brand, keeping public interest alive; recent sightings included South Korean singer Baek Ji-young reportedly gushing over Tesla’s Cybertruck.
Although Tesla's future remains uncertain amid declining sales and mixed investor sentiment, it maintains its position as a significant player not only in the electric vehicle market but also within the larger scope of public and investor narratives, promising continuous engagement from stakeholders and spectators alike.