Yesterday evening, Tesla reported first-quarter earnings for 2025, and they were abysmal: Profits dropped 71% from the same time last year.
Musk sounded bitter on the call with investors that followed, blaming the company’s misfortune on protesters who have raged at Tesla dealerships around the world over his role running DOGE and his ardent support of far-right politicians.
“The protests that you’ll see out there, they’re very organized. They’re paid for,” he said, without evidence.
They can’t distance from Elon because his supposed genius is a key factor in why they’re so absurdly overvalued. If they dump him, they immediately get viewed as a car company. Car companies have P/E ratios of about 7, if they’re well run like Toyota. That would mean they’d lose 95% of their value.
If they don’t distance from Elon, then they have to deal with his personal brand constantly tarnishing their corporate brand. Somehow they have to convince themselves that people will get over Elon fast enough to get their sales back up. Even if he “gets out of politics”, whatever that means, I don’t see that happening. He has burned all his bridges, and there’s no going back.
Also, it’s absolutely ridiculous that they would have a high valuation because of self-driving cars. Tesla is the company in absolutely last place when it comes to developing self-driving car technology. They don’t even use LIDAR, so they can be fooled by a Bugs Bunny / Roadrunner trick.
Waymo is probably in first place in self-driving tech. They have actually been running a taxi service for years using self-driving cars. Cruise was probably in second place before they were shut down and absorbed into GM. So, you could maybe say GM is in second place. Zoox, Pony.ai, Motional, etc. are also all doing well. Tesla is probably dead last, and their very public failures are dragging the industry down. The fact that they called their tech “full self-driving” and that it was so bad prompted all the other companies to rename what they were doing so they weren’t associated with Tesla.
Eventually someone’s going to make a killing shorting Tesla. The only problem is that markets can remain irrational longer than most people can remain solvent. Who knows when this might finally end.