Analyst Says Tesla (TSLA) ‘Massively Overvalued’ Amid Notion of Elon Musk’s ‘Magic Abilities’

Fahad Saleem

Mon, May 19, 2025, 8:51 AM 3 min read

Tesla (TSLA) shares were tanking on Monday as valuation concerns keep weighing on the stock. In a latest development, billionaire Dan Loeb's Third Point cut its entire stake in the company during the March quarter.

Bradley Tusk, Tusk Venture Partners co-founder and managing partner, said in a recent program on CNBC that Tesla Inc (NASDAQ:TSLA) is “massively overvalued” and talked about the impact of Elon Musk’s distractions on the company:

“I think you'll have a chance to make some choices, right? I kind of get the notion that if you're him and you're thinking, "Why don't I just keep pushing the envelope, see how much I can do, see how much I can get away with, see how rich and famous I can become." And so I get why he's doing that. But let's be honest about Tesla—it is a company that is massively overvalued solely based on the pixie dust of the notion of Elon Musk's kind of magic abilities and retail investors believing in that. And he, to a certain extent, has to choose. If he wants to keep reaping the benefits of that, he needs to be at Tesla and be focused on Tesla. If he'd rather focus on Doge, or SpaceX, or xAI, or whatever else it is, that's fine. But what he can't have is the cake of way artificially high valuations for Tesla, um, and then eating it too—meaning doing everything but Tesla.”

Tesla's valuation concerns aren't groundless. The company's EV sales are falling all over the world as the company faces challenges from competitors. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.

Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:

“The underweight in Tesla, Inc. (NASDAQ:TSLA) contributed to performance in the first quarter of 2025. Tesla’s automobile sales declined in the quarter, in part due to factory changeovers that were required for updates to the company’s best-selling vehicle, the Model Y. This resulted in slower sales volume in the quarter. Competition from China’s BYD is causing market share losses for Tesla in several non-U.S. markets. The CEO’s position as an advisor to President Trump has damaged Tesla’s brand image among a cohort of traditional electric vehicle buyers.”

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