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We came across a bearish thesis on Tesla, Inc. (TSLA) on Substack by Stefan Waldhauser. In this article, we will summarize the bears’ thesis on TSLA. Tesla, Inc. (TSLA)'s share was trading at $337.80 as of Feb 21st. TSLA’s trailing and forward P/E were 165.59 and 113.64 respectively according to Yahoo Finance.
Tesla has long defied skeptics, maintaining an inflated stock price despite concerns about its business fundamentals. For years, the company has relied on Elon Musk’s bold promises—robotaxis, humanoid robots, and AI breakthroughs—to distract from stagnating automotive sales. However, a recent in-depth report by Manager Magazin provides alarming insights into Tesla’s deteriorating position, highlighting growing brand erosion, employee dissatisfaction, and technological shortcomings.
The report suggests Tesla is at risk of becoming one of the biggest stock market failures in history. Once a feared industry disruptor, the company now risks mirroring Nokia’s downfall in the electric vehicle (EV) revolution. Car dealerships in Germany are witnessing an increasing reluctance among buyers to purchase Teslas, fearing declining resale values. Brand Finance reports Tesla’s brand value has plummeted 26% globally in the past year, falling from ninth to 36th place in global rankings. What was once a luxury brand is now perceived as an everyday car, undermining its pricing power. The much-hyped Cybertruck, which allegedly had a million pre-orders, has seen underwhelming sales of less than 40,000 units so far—figures Musk refuses to disclose transparently.
Internally, Tesla is struggling to attract and retain top talent. High-level executives are reportedly embarrassed to work for Musk, and a wave of key employee departures is expected in the coming months. Meanwhile, Musk's obsession with AI has led him to divert resources away from Tesla, including critical Nvidia AI chips and key AI personnel to his xAI venture, further weakening Tesla’s competitive edge.
The much-hyped robotaxi initiative, a key driver of Tesla’s valuation, remains a pipe dream. Despite Musk’s claims, Tesla’s autonomous technology is still “several thousand times” away from reaching the required safety level. While Musk has promised to launch a robotaxi service in Austin by June 2025, industry experts believe he will either delay or resort to questionable tactics. If Tesla attempts a large-scale rollout prematurely, it could result in fatal accidents, drawing severe regulatory backlash.
Despite these warning signs, Tesla’s stock remains grossly overvalued. After a 30% decline from its December 2024 high, many investors are promoting a “buy the dip” narrative. However, Tesla’s fundamentals have worsened significantly, with a P/E ratio of 170, a cash flow multiple of 300, and an EV/Sales ratio in the double digits. The stock’s valuation is sustained primarily by retail investors who continue to buy into Musk’s grand vision, believing “this time will be different.”