Tesla Investor Voices Concerns Over Musk’s Political Ties and Company Challenges
Prominent Tesla investor Ross Gerber has expressed skepticism about the potential benefits of CEO Elon Musk’s ties to President Donald Trump for the electric vehicle manufacturer. Despite recent investor optimism following Musk’s increased political involvement, Gerber highlights ongoing challenges faced by Tesla.
In a recent statement, Gerber suggested that Tesla’s stock is currently overvalued and should be trading around $200. This assessment comes as a surprise from a longtime Tesla supporter, who now acknowledges the significant hurdles the company faces.
“Despite Musk’s new government role, Tesla’s core issues remain unresolved,” Gerber stated. His fund has already reduced its Tesla holdings, maintaining only a small portfolio concentration in the company.
Tesla’s recent performance has been mixed. The company exceeded third-quarter earnings expectations, which eased some investor concerns. Some analysts view Musk’s political influence as potentially advantageous for Tesla. However, Gerber remains cautious about the company’s prospects.
One of the key areas of concern for Gerber is Tesla’s self-driving technology. He criticizes the persistent flaws in the system and expresses worry about Musk’s focus on government roles over Tesla’s operations. Additionally, Gerber voices skepticism about the viability of Tesla’s proposed ride-hailing platform against established competitors.
Policy changes could also impact Tesla’s market position. The potential end of the $7,500 EV tax credit could negatively affect Tesla sales. While Musk supports the repeal, believing it harms competitors more than Tesla, Gerber estimates a 25% drop in Tesla sales without the tax credit.
Looking ahead, Gerber is considering further reducing his Tesla investment if business conditions don’t improve. However, he maintains a small investment in the company due to his general bullishness on the electric vehicle market.
“Caution is advised for both sellers and buyers of Tesla stock,” Gerber concluded, emphasizing the complex landscape facing the innovative automaker.
As Tesla navigates these challenges, investors and industry observers will be closely watching how the company addresses its technological hurdles and adapts to potential policy changes in the evolving electric vehicle market.
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