Tesla tumble? Ross Gerber, top shareholder, predicts a 50% drop in 2025, cites these as major reasons

Tesla investor Ross Gerber has been warning about Tesla's future for some time now, and the latest forecast made by him isn't optimistic. Following a rough start for Tesla stock this year, Gerber, the CEO of Gerber Kawasaki Wealth & Investment Management, has forecasted a possible decrease in Tesla stock price by up to 50% by 2025-end, reported Business Insider. Here is his reasoning.

Full self-driving: Too ambitious, too soon

Gerber cited Elon Musk's overly ambitious goal of rolling out a full self-driving network by June in Austin, Texas, which will be impossible to achieve. Gerber doesn't think Tesla can hit this timeline, particularly because the company's autonomous system is based on cameras instead of the lidar sensors employed by rivals such as Alphabet's Waymo.

He claimed, "We're well behind in robotaxi and autonomy, there's no question now," as quoted by Business Insider. He also added "I'm in the camp now that you need lidar to have a safe enough system for Full Self-Driving," as quoted in the report.

Elon Musk's overstretched focus

As CEO of several corporations, including Tesla, SpaceX, and xAI, Gerber thinks Tesla CEO Elon Musk's time is too divided, and it's impacting Tesla's performance. With Musk diverted to artificial intelligence and his many personal pursuits, Gerber fears Tesla is being neglected.

According to him, Musk's "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," as quoted in the report. Gerber would feel a lot more confident about Tesla if Musk had put all of his time into full self-driving technology.

Slowing sales and fierce competition

For Gerber, the fall in Tesla's vehicle sales represents an ominous trend for the company. Even after its initial success, Tesla experienced its first year of declining EV sales in 2024. Competition is growing stronger, particularly from Chinese car maker BYD, which Gerber considers a strong threat to Tesla's leadership of the worldwide EV market, as per the report.

Gerber claimed, "Xi has made it very clear that he wants Chinese tech and EV companies to succeed, not Tesla," as quoted in the report.

Further, Gerber cited another threat to Tesla is Musk's close association with US president Donald Trump. This has escalated pushback in some markets, such as France, Germany, and Norway, where Tesla sales dropped in January 2025, reported Financial Times.

According to him, "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," as quoted by Business Insider.

Overinflated stock valuation

Lastly, Gerber is opposed to Tesla's valuation, which he considers to be unsustainable. At a market capitalization of $1.1 trillion, Tesla is almost five times bigger than Toyota, yet it makes only a small fraction of the profits of Toyota, reported Business Insider. With a price-to-earnings ratio of 118, Tesla stock is much more expensive than its peers, such as Nvidia, and Gerber thinks that the company is inflated too much.

He claimed "The issue to me is, I've got $100 million in Tesla stock at 125 times earnings, and it's not even close to any PE, to any normal Mag Seven stock," as quoted in the report. He also added that Tesla's vulnerability is it could drop by 50% if things don't work out for it this year. Gerber said "So we sell Tesla stock. We still have tons of it, and we sell it because we think it's pretty overvalued," as quoted by Business Insider.

FAQs

What is Ross Gerber's forecast for Tesla stock?
Gerber forecasted Tesla's shares will drop as much as 50% by the end of 2025.

How does Tesla's stock value compare with other carmakers?
Tesla is worth $1.1 trillion in market capitalization, way above automobile companies such as Toyota. But, in the view of Gerber, Tesla is overvalued.