Tesla Stock Crash: How Far Can Tesla Stock Drop From Here? | $TSLA
Overall Thesis
Tesla stock could fall 80-90% or more from current levels if operations continue deteriorating in 2025, as the company's valuation multiples are unjustifiably high relative to slowing growth and deteriorating margins compared to legacy automakers.
Narratives
GM is presented as a comparison point to Tesla, trading at much lower valuations and actually growing faster than Tesla currently. The YouTuber views GM as fundamentally more attractive than Tesla on a relative basis.
Key Arguments
- GM is growing faster than Tesla currently
- Trading at much lower multiples - 0.3x sales vs Tesla's 8.2x
- Trading at 4-5x earnings vs Tesla's 116x
Tesla's operations are deteriorating with sales falling over 50% in certain countries, margins at industry average despite subsidies, and the company trading at unsustainable multiples compared to legacy automakers. The YouTuber believes Tesla could easily fall another 90% if operations continue to deteriorate.
Key Arguments
- Tesla's margins are now about industry average, not superior as claimed
- Tesla is growing more slowly than GM and Ford, with auto business down 8% last quarter
- Trading at 8.2x sales vs GM at 0.3x and Ford at 0.2x - could fall 90% and still be overvalued
- High fixed costs from manufacturing plants make company vulnerable to losses if sales drop
- Expected products like FSD and Optimus face significant competition and uncertain timelines
Ford is presented alongside GM as a comparison to Tesla, showing much more reasonable valuations and faster growth. The YouTuber uses Ford to illustrate how overvalued Tesla appears relative to traditional automakers.
Key Arguments
- Ford is growing faster than Tesla
- Trading at 0.2x sales vs Tesla's 8.2x
- Much lower P/E ratio than Tesla
Hedges & Caveats
- Analysis based on early 2025 sales data that may not be representative of full-year trends
- Assumes continued operational deterioration and margin compression
- Dependent on potential elimination of $7,500 EV tax credit by Trump Administration
- Excludes potential positive catalysts or operational improvements
- Valuation comparison assumes legacy automaker multiples remain constant