Investor and analyst Gary Black, managing director of The Future Fund LLC, has questioned Tesla Inc.’s valuation as sales continue a downward trend. In a recent post, Black shared his concerns about the EV giant’s valuation, stating that it “doesn’t make mathematical sense” when accounting for the fact that EV sales comprise over 72% of the automaker’s profits.
Does Not Make Mathematical Sense
Black’s comments come as Tesla’s sales continue to decline, with the company selling close to 589,000 units in 2025, a 7% decline. The investor pointed out that Tesla’s near-term 2026 and long-term 2030 Adj EPS estimates were also declining. Black said, “I realize TSLA isn’t just a car company, but that doesn’t make mathematical sense” when considering the significant contribution of EV sales to the company’s profits.
Tesla’s Master Plan IV
It’s worth noting that Tesla’s Master Plan IV, released last year, outlines a significant shift in focus away from its core EV business to autonomous driving and robotics. CEO Elon Musk has predicted that the company’s Optimus humanoid robot would comprise 80% of Tesla’s future value. However, Black’s comments suggest that the company’s current valuation may not be justified, given the decline in EV sales.
Tesla Sales and Marketing Woes
The comments follow Tesla’s Model Y SUV emerging as the best-selling EV in the U.S. market in 2025, with the company selling more than 350,528 units of the SUV last year. However, Tesla’s cumulative sales were still down, and the investor has also urged the automaker to up its marketing game, with the company’s Full Self-Driving (FSD) technology boasting a take rate of approximately 15%.
Price Action
TSLA slipped 0.39% at market close on Tuesday to $447.20, declining 0.08% further to $446.85 during after-hours trading. The company’s valuation and sales performance will likely continue to be closely watched by investors and analysts in the coming months.
Conclusion
In conclusion, Tesla’s valuation is under scrutiny as sales continue to slump. The company’s shift in focus towards autonomous driving and robotics may be a key factor in its future success, but for now, the decline in EV sales and poor marketing performance are major concerns. Investors will be watching closely to see how Tesla addresses these challenges and whether the company can justify its current valuation.