"What's Really Driving Tesla’s Stock: Fundamentals or Elon Musk's 'Vibes'?"
By Gabriel Salas | March 10th, 2025
Tesla has always been a puzzling stock, balancing between concrete fundamentals and the visionary promises of its charismatic CEO, Elon Musk. But lately, investors are starting to wonder: Which matters more—numbers or narratives?
Key Points:
Tesla faces declining sales volumes and shrinking profit margins.
International markets severely impacted; significant sales drops in Germany and China.
Musk’s political involvement may be negatively affecting the brand and sales.
High-stakes Robotaxi reveal scheduled for June 2025 could make or break investor sentiment.
Tesla’s Fundamental Challenge
Tesla, once a shining growth star with expectations of 50% volume growth annually through 2030, now faces significant hurdles. Declining sales, tightening margins, and disappointing launches (notably the Cybertruck) have dampened investor enthusiasm. Aggressive competition, especially from Chinese automakers, has intensified pressures, leading Tesla to implement price cuts that hurt profitability.
International Troubles Brewing
Tesla’s international performance is alarming. Sales in Germany dropped dramatically—down 59% in January and 76% in February year-over-year. China paints a similar troubling picture, with Tesla's local sales plunging 49% in February alone. Tesla’s global footprint is shrinking rapidly, challenging its growth narrative.
Is Musk’s Political Role Hurting Tesla?
Elon Musk's visible political involvement might be contributing to declining sales domestically, particularly in key markets like California and New York. With a majority now disapproving of Musk’s political stances, Tesla’s U.S. sales fell by 11% year-over-year in January, raising concerns about market saturation and weakening brand loyalty.
Awaiting the Robotaxi Moment
Tesla’s next major milestone—the June 2025 robotaxi launch—could significantly influence investor sentiment. But caution is warranted: Tesla’s previous high-profile event, the "We, Robot" announcement in October 2024, resulted in an 8.8% stock drop. If the upcoming robotaxi doesn't clearly outperform rivals like Alphabet’s Waymo (already operating in several cities), investors might quickly lose patience.
Bottom Line:
Tesla's current valuation heavily depends on the "vibe"—faith in Musk's visionary promises. Until fundamentals catch up or innovative promises materialize convincingly, caution is advised.
