He was once Elon Musk’s biggest believer. Now he’s doubling down on why Tesla stock will feel serious pain in 2025.

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He was once Elon Musk’s biggest believer. Now he’s doubling down on why Tesla stock will feel serious pain in 2025.

Emma McIntyre / Staff/Getty Images

Ross ******* was an early investor in Tesla, buying in before the stock boomed.

But he’s gotten increasingly outspoken about issues he sees with Elon Musk and Tesla, and has sold shares.

******* outlined for *** four reasons why he expects Tesla shares to fall as much as 50% in 2025.

Tesla shareholder Ross ******* is no stranger to bearish takes on the company, at least lately.

In the middle of last year he revealed that he’d

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on concerns its vehicles were fading in popularity. Then, after Donald Trump’s election victory, ******* said in early December that Tesla would

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, if any, from Elon Musk’s association with the president.

The warnings now seem prescient. After an initial post-election surge, Tesla shares are down 16% so far in 2025, and sit roughly 4% lower since *******’s December comments.

It’s a trend ******* sees continuing amid a collection of familiar issues, including a lofty valuation, worries about the company’s Full Self-Driving capabilities, and the knock-on effects of Musk’s unpredictable behavior.

In new interview with Business Insider, ******* took his bearishness even further, outlining why he sees Tesla vulnerable to a drawdown of as much as 50%.

To his credit, ******* — who is the president and CEO of ******* Kawasaki Wealth & Investment Management — has had no issue putting his money where his mouth is. He reduced his firm’s Tesla stake by 31% in 2024, regulatory filings show, leaving him with 262,000 Tesla shares worth $106 million at the end of last year.

Detailed below are four reasons informing *******’s expectation for a rough year for Tesla:

******* sees a disaster for Tesla stock this year because Musk’s June target of

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in Austin, Texas is too ambitious.

“All of this stuff is going to come to roost this year because he put this deadline on full self driving working in a couple months. It almost seems impossible for that to happen,” ******* told ***.

According to *******, the core issue is that Tesla’s autonomous driving platform doesn’t use the

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that other driverless systems, like Alphabet’s Waymo, rely on. Instead, it uses cameras.

“We’re well behind in robotaxi and autonomy, there’s no question now,” ******* said, adding that he thinks Waymo’s approach is “a safer system.”

“I’m in the camp now that you need LIDAR to have a safe enough system for Full Self-Driving,” he said. “They’re going to run into a wall, where they can’t get better unless they change the hardware.”

Story Continues

From running several companies, including Tesla, SpaceX, and xAI, to

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to spearheading government efficiency efforts at DOGE, to

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it’s safe to say there might not be enough time in the day for Musk.

******* thinks that’s a problem for Tesla shareholders, especially considering Musk’s sole focus in recent months appears to have been AI.

“His 100% focus is on AI, and that’s really a detriment to Tesla more than it’s a plus for xAI and all the other businesses because he doesn’t work at Tesla anymore,” ******* said.

“If he were putting all of his time into full self-driving, I’d feel a lot more confident about Tesla.”

While

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focuses on its autonomous and robotic ambitions, selling cars remains its core business, and that’s starting to slow.

Last year marked

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After forecasting 20%-30% growth in 2025, management has since said on its latest earnings call that it expects a “return to growth.”

For *******, increasing competition from BYD, the largest EV maker in the world based out of China, is a real threat to Tesla’s EV business outside the US.

“Xi has made it very clear that he wants ******** tech and EV companies to succeed, not Tesla,” ******* said. “BYD is such a good company, everybody in the emerging markets are buying BYDs.”

Tesla sold almost 1 million vehicles in China last year.

The other threat to Tesla is Musk’s close association with President Donald Trump.

“What this does is it creates this anger. I’ve never seen this anger towards Tesla, but it’s not toward Tesla as the company, it’s because of Elon, this is the only way people can take it out,” ******* explained.

Singer Sheryl Crow posted

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this week waving goodbye to her Tesla, which she sold in protest.

“There comes a time when you have to decide who you are willing to align with. So long Tesla,” Crow wrote on

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.

The trend could be picking up steam outside the US, with the

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reporting that Tesla’s January vehicle sales plunged 63% in France, 60% in Germany, and 38% in Norway.

“We’ve got to sell cars, and people just don’t want them anymore,” ******* said.

Tesla has always traded at a premium valuation relative to other automakers and its mega-cap tech peers, but if Tesla’s slowdown in vehicle sales continues, that premium could diminish considerably.

At a $1.1 trillion market capitalization, Tesla is nearly 5x larger than

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despite delivering just 20% of Toyota’s profits last year, according to data from YCharts.

Its forward price-to-earnings ratio of 118x is more than triple that of the next most expensive “Magnificent 7” stock,

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, and is above its five-year average of 84x.

“The issue to me is, I’ve got $100 million in Tesla stock at 125x earnings and it’s not even close to any PE, to any normal Mag 7 stock,” ******* said. “So Tesla’s vulnerability is it could drop by 50% if things don’t work out for it this year. So we sell Tesla stock. We still have tons of it and we sell it because we think it’s pretty overvalued.”

Some major Wall Street firms may agree with *******. JPMorgan was bearish on

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Despite an initial burst of enthusiasm from investors, the bank said it is sticking with a $135 price target for Tesla stock, representing potential downside of 60% from current levels.

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