Ricardo Pillai
3 min read
In This Article:
We came across a bearish thesis on Tesla, Inc. on High Growth Investing’s Substack by Stefan Waldhauser. In this article, we will summarize the bears’ thesis on TSLA. Tesla, Inc.'s share was trading at $322.16 as of June 20th. TSLA’s trailing and forward P/E were 184.09 and 166.67, respectively, according to Yahoo Finance.
A modern electric vehicle charging at an electric car station.
Tesla’s Q1 2025 earnings report confirmed deep operational challenges, with revenue from its core electric vehicle business plunging 20% year-over-year and falling below 2023 levels. Operating income dropped by two-thirds, with the auto segment slipping into the red. Management has withheld forward guidance, citing uncertainties and transitional disruptions, including a Model Y production shift.
Despite these bleak figures, Tesla’s stock has continued its meteoric rise, up 70% from a year ago, driven by investor faith in Elon Musk’s bold AI ambitions. Musk, pledging reduced political engagement and increased CEO focus, maintains Tesla should be viewed not as a carmaker but as a future leader in AI, robotaxis, and humanoid robotics. Tesla plans to launch a limited robotaxi trial in Austin by June with a small fleet of Model Ys aided by remote operators—an approach that resembles Waymo’s model but sans LIDAR, relying solely on cameras and AI.
While Musk insists this is scalable, critics argue it's overly ambitious. Optimus, Tesla’s humanoid robot, is another linchpin in Musk’s vision, with plans for thousands in production by 2025 and over a million sold annually by 2030. However, component export restrictions and regulatory concerns cloud that timeline.
Meanwhile, Tesla’s booming energy storage business grew 67% in Q1, though future tariffs may impact it. Valued at $800 billion, Tesla’s stock reflects massive belief in unproven technologies, with its traditional auto business possibly justifying 10% of that figure. Skeptics now expect full-year losses, and short positions are growing. Yet, Musk’s unpredictability means anything—from flying cybercabs to MAGA drones—could reshape the narrative again.
Previously we covered a bearish thesis on Tesla, Inc. by Stefan Waldhauser in February 2025, which highlighted brand erosion, internal talent issues, and overreliance on speculative AI promises. The company’s stock price has depreciated approximately by 5% since our coverage. This is because the thesis partially played out as fundamentals weakened but speculative investor belief held firm. Stefan Waldhauser shares an identical view but emphasizes on concrete earnings deterioration and rising operational losses.
