Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management and a Tesla shareholder, has predicted a 50% decline in Tesla’s stock price this year. This forecast comes after Gerber offloaded approximately $60 million worth of Tesla shares, citing concerns over the company’s dwindling popularity.
Background
Tesla’s shares have witnessed a 16% decline this year and have fallen 4% since Gerber’s remarks in December. Despite a brief spike following the 2024 election, the company’s stock performance has been under scrutiny. Gerber’s prediction is based on four key reasons:
- Autonomous Taxi Network: Gerber expressed skepticism over Elon Musk’s ambitious goal of rolling out an autonomous taxi network in Austin, Texas, by June. He stated that meeting this deadline seems almost impossible.
- Self-Driving Platform: Gerber voiced concerns about Tesla’s self-driving platform, which depends on cameras rather than LIDAR sensors.
- Competition from BYD: Gerber indicated that Tesla’s primary business of car sales is slowing down due to rising competition from BYD, the world’s largest EV manufacturer based in China.
- Musk’s Focus on AI: Gerber suggested that Musk’s emphasis on AI could prove harmful to Tesla, as it takes away from the company’s core business.
Potential Backlash
Gerber also underscored the potential backlash Tesla may face owing to Musk’s close ties with President Donald Trump. He stated that this association could create anger towards Tesla, which could negatively impact the company’s stock performance.
Wall Street Perspectives
Gerber’s bearish perspective is echoed by several prominent Wall Street firms, including JPMorgan, which has set a $135 price target for Tesla stock, indicating a potential 60% downside from its current levels.
Conclusion
Gerber’s prediction comes at a time when Tesla’s stock performance has been under scrutiny. His concerns about Tesla’s autonomous driving platform and the potential backlash due to Musk’s association with President Trump underscore the challenges that Tesla may face in the coming years. As the company’s shares continue to decline, it remains to be seen how Tesla will address these challenges and regain investor confidence.