Investor Ross Gerber Raises Concerns Over Falling Earnings at Tesla
Ross Gerber, the president and CEO of Gerber Kawasaki Wealth and Investment Management, and a well-known Tesla Inc bull and investor, recently expressed his concerns over the declining earnings of the electric vehicle giant despite higher sales. In an interview with Last Call CNBC, Gerber highlighted the need to address the reasons behind this trend.
“We’re selling Cybertrucks left and right. This should be a rally period for Tesla,” Gerber stated. He pointed out that while Tesla is selling more vehicles, including some incredible models, the earnings and subsequently the stock price are going down. Gerber emphasized that this discrepancy needs to be addressed by the company.
According to Gerber, investors have been evaluating Tesla more as a hardware company rather than a software company, which has led to some challenges. He noted that Tesla is resorting to traditional automaker tactics to boost sales in a competitive market like China. Additionally, Tesla has struggled to achieve autonomous driving, which Gerber believes is crucial for adding value to the company.
“Those are the brand levers that gave Tesla a premium, and between Elon’s behaviors and a lack of completion of many projects, Tesla is coming down to Earth to a more reasonable valuation,” Gerber explained. He added that the current valuation of the company is where it should be.
The concerns raised by Gerber come at a time when Tesla shares have experienced a significant drop, with a 7% decline on Monday following reports of lower vehicle sales in China. The company sold 60,365 electric vehicles in China in February, representing a nearly 19% decrease year-over-year. This news, coupled with a 24% year-to-date decline in Tesla’s stock price, has raised questions about the company’s performance.
In 2023, Tesla delivered over 1.8 million vehicles, an increase from the previous year. However, adjusted EBITDA fell by 13% to $16.63 billion. These figures suggest that while Tesla is selling more vehicles, its profitability may be under pressure.
Overall, Gerber’s comments shed light on the challenges facing Tesla and the need for the company to address its falling earnings despite higher sales. As Tesla continues to navigate a competitive market and work towards achieving key milestones like autonomous driving, investors will be closely watching how the company responds to these challenges in the coming months.
