Tesla’s Business Is in Decline, Says Ross Gerber
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Tesla quarterly deliveries seen falling again
Tesla is expected to report another fall in quarterly deliveries on Wednesday. Analysts expect an 8% sales decline this year. Some prospective buyers were irked by Musk’s public embrace of far-right politics. The backlash, along with customers choosing cheaper Chinese EVs, led to the fifth straight month of falling sales for Tesla in Europe, with a 27.9% drop in May, data from the European Automobile Manufacturers Association showed. The global EV market has been growing, albeit at a slower pace than in previous years, but annual sales of Tesla’s aging lineup fell for the first time in 2024, according to the EMA. The company has said the fall last quarter was due to a pause in production to shift to a refreshed version of its best-selling Model Y SUV, and analysts had said many customers were delaying purchases as they waited for it to roll out. The new Model Y in my mind isn’t such a departure from the old Model Y,” said Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management.
Item 1 of 2 Tesla electric vehicles are pictured at one of the company’s delivery centers in Valenton, near Paris, France, April 24, 2025. REUTERS/Benoit Tessier
Summary
Companies Q2 Tesla deliveries seen falling 11% y-o-y on average
Demand weak in Europe, China amid competition, Musk backlash
Analysts expect sales to fall 8% in 2025
July 1 (Reuters) – Tesla (TSLA.O) , opens new tab is expected to report another fall in quarterly deliveries on Wednesday as the backlash against CEO Elon Musk’s political views and competitive pressures continue to drag on demand.
While much of Tesla’s trillion-dollar valuation hangs on Musk’s bet on commercializing robotaxis , most of the company’s current revenue and profits come from its core business of selling electric vehicles – one that has been under pressure due to high interest rates and rising competition.
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The global EV market has been growing, albeit at a slower pace than in previous years, but annual sales of Tesla’s aging lineup fell for the first time in 2024. While Musk has said sales will return to growth in 2025 – a pullback from his earlier promise of 20-30% growth – analysts expect an 8% sales decline this year.
For the second quarter ended June, Tesla is expected to deliver 394,380 units, according to 23 analysts polled by Visible Alpha. That would be a drop of more than 11% year-over-year, and would follow a 13% decline the company reported in the previous quarter.
Tesla has said the fall last quarter was due to a pause in production to shift to a refreshed version of its best-selling Model Y SUV, and analysts had said many customers were delaying purchases as they waited for it to roll out.
“I think a lot of analysts were thinking this quarter would have a bump positive because of the new Model Y,” said Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management. “But the new Model Y in my mind isn’t such a departure from the old Model Y,” he said, adding that demand for the model did not live up to expectations.
Instead, people bought fewer Tesla vehicles. Some prospective buyers were irked by Musk’s public embrace of far-right politics in Europe and work for U.S. President Donald Trump overseeing cuts to federal jobs and funding.
Though Musk has shifted his focus back to his companies, the backlash, along with customers choosing cheaper Chinese EVs, led to the fifth straight month of falling sales for Tesla in Europe , with a 27.9% drop in May, data from the European Automobile Manufacturers Association showed.
“Lagging sales in Europe compared to the rest of the EV market and the increasing competition in China are both working against Tesla going forward,” said Sam Fiorani, vice president at research firm AutoForecast Solutions.
To achieve Musk’s target of returning to growth this year, Tesla – if those second-quarter estimates are accurate – would need to hand over more than a million units in the second half, which would be a record and a tough challenge, according to Wall Street analysts, although typically sales are stronger in the latter half.
Some help could come from Tesla’s planned cheaper model – expected to be a stripped down Model Y – that the company has said it will start producing by June end. Reuters reported in April it would be delayed by at least a few months
After tanking early this year amid angry anti-Musk protests, Tesla shares have regained some ground recently. Last month, the company rolled out about a dozen robotaxis in a limited part of Austin, Texas, ferrying a small group of invited fans for a nominal fee but with a safety monitor and other restrictions.
Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco, Editing by Rosalba O’Brien
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Ross Gerber has dumped Tesla stock while calling for a collapse. Shares are up more than 50% from recent lows.
Ross Gerber, a longtime Tesla investor who’s turned bearish, unloaded more shares of the electric vehicle maker in the first quarter. His firm, Gerber-Kawasaki Wealth and Investment Management, shed more than 26,000 shares, or a little over 10% of its stake. It was the firm’s largest stock sale in the quarter, its 13F filing shows. However, shares have reversed course in the second quarter and are up 52% from their lows in April. The move higher has been sparked by CEO Elon Musk’s announcement that he would step back from the Department of Government Efficiency. Gerber said he’s not moved by recent developments that have propped up Tesla’s share price. He said he doubts Tesla can follow through with all the promises it’s made to investors.
Ross Gerber, a longtime Tesla investor who’s turned bearish, unloaded more shares of the electric vehicle maker in the first quarter.
The latest quarterly filing from Gerber’s firm, Gerber-Kawasaki Wealth and Investment Management, shows that the investor backed up his recent bearish views on Tesla with more sales, shedding more than 26,000 shares, or a little over 10% of its stake. It was the firm’s largest stock sale in the quarter, its 13F filing shows.
It’s unclear at which point in the quarter Gerber’s firm sold. However, following a 35% drop in the stock in the first three months of the year, shares have reversed course in the second quarter and are up 52% from their lows in April.
Related video Tesla shareholders fear Elon Musk’s focus on DOGE is tanking stock prices
The move higher has been sparked by CEO Elon Musk’s announcement that he would step back from the Department of Government Efficiency. Shares have also jumped on a broader rally as tariff headwinds eased in recent weeks.
Shares of the carmaker are still down around 29% from their highs in late 2024.
In a recent interview, Gerber told Business Insider that he’s not moved by recent developments that have propped up Tesla’s share price.
Gerber said Elon Musk’s departure from DOGE and progress on US-China trade are positive forces, but neither of those things changes what he sees as the company’s fundamental issues.
Gerber said there are three problems:
Full self-driving “doesn’t work,” Gerber said, referring to some reports of user issues with the technology. Tesla has faced lawsuits related to its FSD tech. People aren’t buying Teslas. In the first quarter, Tesla sold 128,100 vehicles in the US, down 8.6% from last year and 21% from the year prior. In European markets, sales have fallen by as much as 81% month over month . Tesla faces stiff competition as it tries to roll out its robotaxi business. Tesla is due to launch its ride-hailing service sometime this summer, but Gerber thinks the firm will have a hard time competing with rivals like Waymo.
Gerber said he doubts Tesla can follow through with all the promises it’s made to investors.
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“We certainly haven’t changed our view where we would start adding it again,” he told BI, referring to his firm’s holdings of the stock. “In fact, what I think is that this could be an extremely difficult time for them if they don’t pull off or at least convince people that they have a real robotaxi business on the way.”
Gerber correctly called a 50% decline in Tesla stock earlier this year, and his firm has offloaded more than 204,000 shares in the last two years. He added that he’s not convinced by the latest rally.
“I’ve thought it’s been overvalued for a while, and I certainly don’t care if it gets more overvalued. We own a lot of it and I can sell more,” he said.
Gerber said he thinks the company’s future is unclear. It’s possible Tesla could hire a new leader who “can sell cars,” or that Musk can somehow repair his image among disillusioned customers and fix some of the brand damage caused by his foray into politics.
Gerber previously told BI that he believed one of the few ways Tesla could move forward would be by getting a new CEO.
“I think the next six months will really be make or break for them, and we’ll see how they do,” he said.
Ross Gerber Says Elon Musk A ‘Negative’ For Tesla Stock, Trump’s Win Proved ‘Not Good At All’ For Company
Tesla (NASDAQ:TSLA) shares have been under pressure as the company faces falling demand for its vehicles. The stock has lost 33% in value so far this year. Ross Gerber, the co-founder and CEO of Gerber Kawasaki Wealth & Investment Management, said Musk’s reputation is one of the factors negatively impacting the company. Gerber said that consumers need to “feel good” about buying a Tesla, but currently, concerns over political associations and the risk of negative attention are hurting customer sentiment.
Ross Gerber, the co-founder and CEO of Gerber Kawasaki Wealth & Investment Management, said in an interview with Schwab Network last month that Musk’s reputation is one of the factors negatively impacting the company due to the executive’s political affiliations.
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Gerber said that consumers need to “feel good” about buying a Tesla, but currently, concerns over political associations and the risk of negative attention are hurting customer sentiment. He said consumers do not want to be involved in the controversies related to the company, and the “fear” of how people will look at you if you are driving a Tesla car is impacting the company.
“We still own a lot of Tesla. I love the company, but the woes seem to just keep adding up, and the stock has come back to earth because the Musk positive has been offset now with Musk negative,” Gerber said.
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Robo-Taxis Not Enough to Ignite Growth
Talking about Tesla’s financials, Gerber said the company doesn’t “look good” in terms of technicals and fundamentals, as it’s going through brand and execution issues. He believes Wall Street’s earnings estimates for Tesla are still high and are tied to robots and robo-taxis. Gerber called these “moonshot” projects and said Tesla needs to focus more on selling vehicles to consumers:
“The growth isn’t predicated on selling robots or robo-taxis. Its growth is predicated on selling vehicles to consumers,” Gerber told Schwab Network. “So, you know, these projects in some ways like moonshots are like great opportunities for Tesla that I don’t think they should not do, but they should be addressing the vehicle market that made Tesla what it is.”
Why Tesla bear Ross Gerber says he’s even more ‘disturbed’ after the latest earnings
Ross Gerber, president of Gerber Kawasaki Wealth and Investment Management, said Tesla’s first-quarter earnings don’t give him any reason to hope. Gerber said he’s not confident in the timeline for the robotaxi launch in Austin, scheduled for June. He thinks a big problem is Musk himself, even as he steps back from his work with the government.Gerber would also like to see Musk step back from the company and become its CEO, and hire a new CEO who can take over the day-to-day responsibilities of the company’s chairman and chief executive. He said he is using the recent increase in Tesla’s share price as another opportunity to trim his position in the EV maker by 5% of its clients’ shares. The firm has been taking profits for the past two years by selling about 5 per cent of its Tesla shares every quarter of its regulatory filing of its latest filing of 2015 and its fourth quarter of 2015. The stock is trading at a price- to-earnings ratio of more than 150x, and Gerber thinks it could be even higher as earnings continue to decline.
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Investors this week cheered Elon Musk’s planned return to Tesla as he steps back from the White House, but one investor isn’t convinced it will result in a comeback.
Shares of the car maker surged 20% through Friday afternoon since reporting quarterly results on Tuesday, but longtime investor Ross Gerber told Business Insider that Tesla’s first-quarter earnings don’t give him any reason to hope.
Investors looked past the company’s bleak financial results, choosing to focus on Musk’s pledge to spend less time with the Department of Government Efficiency starting in May.
Related video 6 things to look for in Tesla’s ‘company update’
But in an interview with BI this week, Gerber, president of Gerber Kawasaki Wealth and Investment Management, said that investors’ optimism over Musk’s pledge to spend more time at Tesla is misguided and that his return to the company could actually be bad for the business.
Gerber said he was even “more disturbed” after the earnings call.
Musk’s popularity is down
Gerber thinks a big problem is Musk himself, even as he steps back from his work with the government.
When rumors first began swirling that Musk was poised to step back from DOGE, Gerber told BI it wouldn’t matter and that the brand had already suffered.
Survey data from Silver Bulletin shows 53.4% of Americans view Elon Musk unfavorably, while 39.2% have a favorable opinion of the world’s richest person.
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Gerber said that as protests against the company continue, the billionaire’s return could further damage the brand and weigh on EV sales.
“Customers who have a choice on how they vote with their money are voting against him,” Gerber said.
Robotaxis could be a tough business
Gerber’s dismay while listening to the earnings call has to do with the fact that the company has a history of failing to meet its own timelines.
Tesla’s semi-truck and second-generation Roadster are two delayed products that come to mind.
Gerber said he’s not confident in the timeline for the robotaxi launch in Austin, scheduled for June. His skepticism is based on his own experience with the company’s full self-driving software.
“It doesn’t see the people,” Gerber said of his recent experience using the self-driving feature in Los Angeles, adding that he has had a better experience using Waymo’s self-driving cars in his three-mile drive to work.
Gerber also questioned the business sense of the robotaxi initiative.
Even if Tesla’s technology works, Gerber sees ride-hailing as a tough business. Comparable ride-hailing networks have a net profit margin of about 10%, below the mid-teens margin for Tesla’s automotive business.
“They’re better off selling cars,” Gerber said.
What would turn Gerber bullish?
For one, Tesla’s valuation needs to come down. The stock is trading at a price-to-earnings ratio of more than 150x, and Gerber thinks it could be even higher as earnings continue to decline.
Considering the company’s lack of growth, Tesla stock isn’t a buy at its current valuation.
“I just don’t see sales going up, and sales are down 20% on automotive, so kind of the way I see it is that Tesla is in decline at this point,” Gerber said.
Gerber pointed to fast-growing companies, including Costco, Netflix, and Nvidia, as more attractive than Tesla based on their valuation multiples.
Gerber would also like to see Musk step back from the company and become its Chairman, and for Tesla to hire a new CEO who can take over the day-to-day responsibilities and help salvage the brand reputation.
Gerber thinks such a move would allow Tesla to keep its premium valuation tied to Musk’s involvement with the company.
Gerber keeps selling Tesla stock
Gerber said he is using the recent increase in Tesla’s share price as another opportunity to trim his position in the EV maker.
His firm first added Tesla to its portfolio in the fourth quarter of 2015 and, as of December 31, held a $106 million position in Tesla stock.
But over the past two years, the firm has been taking profits for its clients by selling about 5% of its Tesla position every quarter.
According to its latest regulatory filing, Gerber’s firm sold another 28,481 shares of Tesla in the fourth quarter of 2024. Investors will receive an update on the firm’s first-quarter trading activity in mid-May.
Tesla did not respond to a request for comment from Business Insider.
Elon Musk Vows to Spend Less Time in Washington as Tesla’s Profit Drops 71%
Tesla remains the most valuable company in the world as measured by its stock price. But its shares have lost about half their value since mid-December. Some have called on Musk to end his work for the Trump administration and focus on his own company, SpaceX.
Tesla remains the most valuable automaker in the world as measured by its stock price, and it sells far more electric vehicles in the United States than any other company.
But its shares have lost about half their value since mid-December as investors have grown more pessimistic about the company’s prospects and concerned about Mr. Musk’s role in the Trump administration. Some investors and analysts have recently called on Mr. Musk to spend more time managing Tesla and limit or end his work for the Trump administration.
Even if he does spend less time on administration duties, however, his attention will remain divided. That’s because Mr. Musk also runs SpaceX, the social media site X, an artificial intelligence company called xAI and other businesses.
The earnings were well below Wall Street’s expectations. Tesla would have lost hundreds of millions of dollars had it not earned $400 million in interest on cash and investments and $595 million from selling credits to other carmakers that failed to meet emissions regulations that Mr. Trump has pledged to eliminate.