Yahoo Finance

Well, a more hopeful outlook for Tesla emerging as CEO Elon Musk refocuses his attention on the EV maker. Musk stepping away from his identity as an influential political operator as Tesla faces weakness, the company reporting last month its worst quarter for sales in three years. For more now on what's next as Elon Musk enters a new phase, let's get to Gerber Kawasaki Wealth and Investment Management CEO Ross Gerber. Ross, great to see you. So there's a lot of places we could start with this one, Ross. Maybe, you know, you look at Tesla, I know it's down today, Ross, it's in the red. Uh, but what a move for that stock. I mean, you're up about 50% from early April. I'm curious what you make of that move, Ross, and what you would chalk it up to. Is that, you know, is that must saying I'm going to spend more time at Tesla? Is it easing trade tensions with China? Is it, hey, robo taxis on the way in Austin? Is it all three? Something I'm missing? Walk me through it.

Well, I think the first two you're you're dead right on. I don't know about the third because it's really hard to quantify the economics behind launching a robo taxi service and and we certainly don't think it's going to be accretive to earnings like for years. So it took, you know, Uber almost a decade to make money in, you know, the ride sharing business and I don't think it's a very easy business. But I think the other two issues were major issues for Tesla. First of all, Elon wasn't working at Tesla. The the company was adrift. It was a really big positive to see him back, doing interviews from the factory floor. You know, he kind of got the message like you need to show up to work because it's like the company desperately needs it. So that certainly helps boost the stock because whatever Elon's focused on is, you know, he usually gets results. Um, and then secondly, you know, the China thing is a huge problem for Tesla because Tesla is really an important company in China and it's an American symbol of in China like Apple. And I was very concerned that this would, you know, potentially blow up into a full trade war where, you know, the boycotts that we're seeing here in the United States and Europe would extend to China even. And so, you know, I'm pretty happy to see the trade, you know, I wouldn't say be solved, but simmered off a little bit and and it was a direct benefit to Tesla to have Chinese tensions ease. So that did bring the stock back up, but we're now at a valuation that's well beyond even Tesla's traditional, you know, 100 times forward earnings. So, you know, for investors who are concerned about Tesla's future, it's an opportunity to to let go of some of the stock.

Which I know is something that you've been doing. Um, Ross, you know, I also thought I was struck by some of the comments that we heard from Elon Musk when he was speaking to that conference, um, in the Middle East. And among other things, he said he was going to pull back from his political giving. I guess he unless he sees the next opportunity to do political giving where he wants to. But Right. I have to wonder with his sort of backing off of Doge, recommitting to Tesla, um, what and he also made the point that, you know, they might have lost customers on the political left but gained them on the political right. Where do you think the sort of brand goes from here, both in the US and also in Europe?

Well, clearly Elon's trying to minimize a reality that exists right now, which is Tesla sales are going down. And they've been going down substantially even more this quarter. So, you know, there's a little bit of this denial going on of the effect of his political actions on and and, you know, personal belief systems that he's amplified on the actual brand. But the brand is is probably one of the most hated brands in the world now, unfortunately. And for a company that does so much to try to make a difference in climate and and and and for human life in a positive way, it's extremely distressing to me how negative the brand is viewed today. And I don't think he made any attempt to try to reckon with that at all. So I don't know how that solves itself. And I think until Tesla continues to see weak sales, which I think it will, um, at some point, they'll need to address this.