Tesla stock has plunged this year because Elon Musk has too many unfinished projects, Ross Gerber said.
The Tesla investor said the firm was now being valued by investors primarily as a car company.
Gerber has criticized Musk for his leadership of Tesla over the last year.
Tesla stock is in a tailspin because Elon Musk has too many unfinished projects on deck at the car company, according to investor Ross Gerber.
The longtime Tesla bull pointed to various headwinds Musk’s company has battled over the last year, including rising competition. Tesla is still trying to edge out competitors like BYD in China, which prompted the company to issue hefty price cuts on some of its models last year.
Tesla sold 60,365 vehicles in China last month, its lowest month of sales in the country since December 2022, according to data from the China Passenger Car Association. Overseas competition remains a core issue for the carmaker, Gerber warned, as it’s taking attention away from Tesla’s other projects.
“Investors are revaluing Tesla more as a hardware company than a software company because they are having to resort to all the levers that car companies do to increase demand,” Gerber said in an interview with CNBC on Monday.
Tesla has loads of unfinished projects on deck. It still hasn’t completed its full self-driving technology, which is critical to adding value to the company, Gerber said.
Musk has also threatened to move AI projects away from Tesla unless he gains 25% ownership of the company, a request Gerber previously called “delusional.”
“Those are the brand levers that gave Tesla its premium. And between Elon’s behavior and the lack of completion to a lot of these projects, Tesla is just coming down to earth to a much more reasonable valuation, to where it kinda should be.”
Gerber, who previously ran for a seat on Tesla’s board, has been critical of Musk and warned of headwinds facing Tesla over the last year. Musk has effectively “stepped aside” as Tesla CEO amid his erratic behavior on X, and is “blackmailing” investors for more control of the company, Gerber said earlier this year.
Risks stemming from Musk’s leadership haven’t been lost on other Tesla investors. A group of 17 shareholders wrote a letter to Tesla’s board in 2023, asking Musk to be reined in amid his chaotic takeover of Twitter.
Tesla stock dropped almost 3% on early Tuesday to trade around $183.15 a share. Shares are down 24% from the start of the year, leading some investors to note that the company can no longer be lumped in with the Magnificent Seven mega-cap tech stocks whose outperformance has carried the stock market for much of the last year.
Tesla did not immediately respond to Business Insider’s request for comment.
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