TESLA (Cars+)

OCTOBER 2025

                                                           (Listed on NASDAQ. Symbol: TSLA)

The Acamar Spotlight does not usually cover large cap stocks, as they generally have a lot of analyst and media coverage. The focus is typically on small and mid-cap public companies (so investors can buy and sell at will) that will receive a lot less coverage.

Tesla is an intriguing company, so I’m writing about it even though it has plenty of coverage.

Tesla’s CEO, Elon Musk, did something very interesting on September 15: he bought $ 1 billion of Tesla’s stock personally.

Now, if any one individual buys a billion dollars worth of shares, it’s a huge endorsement and would send the stock soaring. And it did. But the reality is more complicated.

Tesla’s board recently gave Musk a pay package that could be worth $ 1 trillion, if he meets targets. And Musk already owns 413 million shares of Tesla. At $ 420 per share, that is worth about $ 173 billion. So what he just bought is a tiny fraction of what he owns and can earn in the future from his pay packet. It wasn’t an investment, it was a marketing expense to get Tesla’s stock up (it had declined from $ 488 to a low of $ 212 in March 2025).As you will see below, Musk has a long history of overhyping Tesla.

When it produced its first car, the all-electric Tesla Roadster in 2008, it caught the public’s imagination, as a sleek, tech enhanced Electric Vehicle (EV). In 2015, Consumer Reports gave the Tesla Model S P85D a “better than perfect” score of 103 out of 100. By late 2020, its market cap exceeded the combined market cap of the 9 largest global automakers, even though it had only 1% of total global vehicle sales.

It has become a meme stock. It’s current price/earnings (P/E) ratio is a stratospheric 251 (the S&P 500 is currently 30). Net income in 2024 was about $ 7 billion on total revenues of $ 98 billion, up 0.95% over 2023.

Since March, analysts have given the company price targets ranging from $ 130 to $475. The average 12-month price target among analysts is $ 301 (Tesla’s current price is $ 434). 

Cathie Wood, the CEO of the $ 6 billion Ark Innovation ETF, projects a price target of $ 2,600 by 2029 as she believes Tesla will transform from a car company to a software one. Tesla is her largest holding, at over 10%.

Tesla has several areas of operation Let’s examine each one:

CAR MANUFACTURING:

Tesla delivered 1.789 million vehicles in 2024, a 1.1% decline from 2023. Since the start of 2025, sales have declined by another 13.5% compared to the first half of 2024.

This is due to CEO Elon Musk’s involvement in DOGE, which has hurt the brand. Sales in Europe are down 40%, and in Canada they are down 67%. Tesla sold 26,000 less vehicles than it produced in Q1 2025.

This trend is likely to continue as it appears that it no longer cool to own a Tesla.

Chinese manufacturer BYD has now overtaken Tesla as the company with the most EV sales globally and other manufacturers are catching up to Tesla, creating a lot of competition for Tesla’s aging models and forcing price reductions.

Musk had great hopes that the Cybertruck would change Tesla’s fortunes. He called in Tesla’s “best product ever.” He touted the bulletproof glass, but in a 2019 public demonstration of this quality, the window shattered when a brick was thrown at it. The first Cybertruck was sold in November 2023 and Musk predicted 250,000 units would be sold by 2025. However, the Cybertruck bombed badly, with 39,000 sold in 2024 and just 6,406 in the first quarter of 2025. Tesla has just cancelled its most affordable Cybertruck, just 5 months after its launch.

Bear this is mind as the new major hype around Tesla is its Robotaxi (also called Cybercab because it is driverless) service, trials of which launched in Austin, Texas in June 2025. It is a limited trial, with a human driver present for interventions if needed. Production is expected in 2026 or 2027.

Cathie Wood of ARK believes that 90% of Tesla’s revenues and earnings will come from Robotaxis and will carry Tesla’s market cap from its present $ 1.14 trillion to about $ 10 trillion! Her optimism is not widely shared among analysts.

Early feedback is that Tesla’s Robotaxi trial in Austin has encountered numerous driving issues, including entering the wrong lane, sudden braking, and leaving passengers at inappropriate locations.

Data from the National Highway Transportation Safety Administration, from June 2021 to June 2024, shows that Tesla’s cars in self-driving mode accounted for 53.8% of all driving incidents involving self-driving cars. In October, they have launched  investigation into 2.88 million Tesla vehicles equipped with its Full Self-Driving system after more than 50 reports of traffic-safety violations and a series of crashes.

And in August 2025, a jury gave a $243 million judgement against Tesla for a lawsuit for a fatal crash involving a self-driving Tesla car using Autopilot. More lawsuits of this nature are in the courts. 

OPTIMUS:

Optimus is a humanoid robot which just went through its first clunky demo (version 2.5). Unlike ARK, Musk is betting the farm on this rather than its Robotaxis. He says he thinks that about “80% of Tesla’s value will be Optimus” and predicted in 2024 that value to eventually be $ 25 trillion.

Musk said that what was then called the Tesla Bot (introduced in 2022) would be 5’8″ and weigh 125 pounds. The robot would be able to deadlift 150 pounds and carry 45 pounds, but only travel around 5 mph. It is designed to work in factories and help around the house.

During a demo event, robots served drinks, answered questions, and played rock-paper-scissors. 

However, Chris Walti, the former team lead for Tesla’s robot, told Business Insider that humanoid robots may not be an ideal fit in factories. “It’s not a useful form factor. Most of the work that has to be done in industry is highly repetitive tasks where velocity is key,” Walti said.

And the challenge for Tesla is that it does not have this space to itself: there are several Chinese companies with functional robots that are quite competitive with Optimus.

ENERGY STORAGE:

This may become Tesla’s most viable segment. It generated $ 3.9 billion in revenues 2022 and just over $ 10 billion (about 10% of Tesla’s total revenues) in 2024. It is profitable and is growing rapidly.

The demand for Tesla’s battery storage products—Megapack for utility-scale applications and Powerwall for residential use—has consistently outstripped the company’s production capacity.

They store excess power from renewable sources like solar and wind, or from traditional grid power, to be used later when demand is high or intermittent renewable supply is low. 

However, a delegation of 25 US VCs recently visited China and reported that China is so far ahead of the US in battery storage technology that the sector in the US is uninvestable.

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Many CEOs of large companies earn tens of millions, or even hundreds of millions, because they are deemed to be so important for their leadership.

Musk is spread pretty thin. Musk has parlayed his involvement with his companies (CEO of Tesla and Space X, and leading roles in X (which has merged with xAI in March 2025), The Boring Company and Neuralink (the computer-brain interface company he founded), into a $ 429 billion fortune (according to Business Insider), making him the richest man in the world.

In 2020, Tesla accounted for 75% of Musk’s net worth. Now his holding of his private companies are worth double that of his holding in Tesla. Musk used the threat that he could spend more time with his other companies rather than Tesla to force Tesla’s board to give him a record breaking pay package that could be worth $ 1 trillion if all earnout conditions are met.

Will Tesla share price, like a SpaceX rocket, escape gravity to soar to a valuation of $ 10-25 trillion? Or will it come back to earth? The hype has worked so far, but I think a day of reckoning is more likely.