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Tesla stock price outlook: 50% crash in 2025 for TSLA, says Ross Gerber

Feb 22, 2025 - businessinsider.com
Ross Gerber, an early investor in Tesla, has become increasingly critical of the company and its CEO, Elon Musk. He predicts that Tesla shares could fall by as much as 50% in 2025 due to several issues. Gerber highlights concerns over Tesla's Full Self-Driving technology, which he believes is lagging due to the absence of LIDAR sensors. He also points out Musk's distractions with other ventures, which may detract from his focus on Tesla. Additionally, Gerber notes a slowdown in vehicle sales, exacerbated by competition from Chinese EV maker BYD and Musk's controversial association with President Donald Trump, which has led to consumer backlash.

Gerber also argues that Tesla's premium valuation is unsustainable if the company's growth continues to slow. Despite Tesla's market capitalization being nearly five times that of Toyota, it delivers only a fraction of Toyota's profits. With a forward price-to-earnings ratio significantly higher than its peers, Gerber believes Tesla's stock is overvalued and vulnerable to a significant decline. He has reduced his firm's stake in Tesla, citing these concerns, and some major Wall Street firms, like JPMorgan, share his bearish outlook, maintaining a price target that suggests substantial downside potential.

Key takeaways:

  • Ross Gerber predicts Tesla shares could fall by as much as 50% in 2025 due to several issues.
  • Gerber criticizes Tesla's Full Self-Driving technology, claiming it lacks the necessary hardware for safety.
  • Elon Musk's distractions and focus on AI are seen as detrimental to Tesla's performance.
  • Tesla's premium valuation is at risk if vehicle sales continue to slow down, with competition from companies like BYD increasing.
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