22 hours ago In a February 7 X post, Johnson outlined three key reasons Tesla could implode this year. First, he argued that Tesla’s stock would have already tanked if Kamala Harris had won the 2024 election. Without strong EV incentives from the current Donald Trump administration, Tesla now faces harsher economic conditions. Second, Johnson stated that with Trump back in office, regulatory shifts could hurt Tesla’s core business as the government moves away from EV subsidies and renewable energy policies. However, some analysts, such as Wedbush Securities Dan Ives, have maintained that without the subsidies, Tesla is likely to thrive thanks to its dominant market position while viewing Trump as bullish for Tesla. Third, the expert noted that Tesla’s key customer base—liberal-leaning Democrats—has increasingly distanced itself from Elon Musk due to his political and social stances, weakening brand loyalty. “TSLA implodes in 2025. Why? B/c: (a) there’s no election bailout (had Kamala won, TSLA’s stock would have already imploded), (b) Trump’s policies = bad for $TSLA’s core biz, & (c) Musk has become toxic to his core customer base (liberal Dems),” the expert said. Backing his claims with data, Johnson highlighted Tesla’s worsening sales: a 50% year-over-year drop in Europe for January 2025, an 8% decline in China, and five consecutive quarters of year-over-year declines in California, its largest U.S. market. Tesla China deliveries. Source: CPCA In the European market, Tesla’s sales plummeted across key regions in what analysts have termed a consumer backlash against Musk’s political stance. For instance, in January, registrations fell 59.5% year-over-year to just 1,277 in Germany, despite the country hosting Tesla’s sole European factory. Despite these alarming trends, Johnson called Tesla’s valuation “absurdly high,” noting that at 181 times its projected 2025 non-GAAP earnings per share, the stock price implies Tesla would need to pay 100% of its earnings as a dividend for 181 years—an unrealistic scenario. The grim outlook for Tesla comes as the company reported weaker-than-expected Q4 2024 earnings. Revenue rose 2% to $25.71 billion, missing the $27.26 billion forecast. Automotive sales fell 8% to $19.8 billion, hurt by lower average selling prices across all major models. Operating income dropped 23% to $1.6 billion, while net income plunged 71% to $2.32 billion, largely due to the absence of last year’s $5.9 billion tax benefit. Meanwhile, Tesla attributed the decline to lower average selling prices across its Model 3, Model Y, Model S, and Model X lineup. Tesla deliveries Regarding vehicle deliveries, the Texas-based EV maker recorded a slight year-over-year drop in 2024 deliveries, falling to 1.79 million from 1.8 million in 2023. However, Tesla maintained a strong daily average of 4,889 shipments, with each quarter improving. Q2 deliveries rose 14.77% from Q1, and Q4 was up 7.06% from Q3. By year-end, Tesla’s daily shipments climbed from 4,251 in Q1 to 5,387 in Q4, highlighting a steady recovery despite the initial decline. Looking forward, Tesla is banking on its full self-driving technology (FSD) and investment in artificial intelligence (AI) to spur growth. However, some analysts have warned that the stock is pricing advancements in these sectors despite no tangible products amid rising safety concerns for FSD. For instance, as reported by Finbold, there have been at least 52 confirmed and 55 claimed Autopilot fatalities, with FSD linked to two recent deaths. Though only seven fatalities (five confirmed, two unconfirmed) occurred in 2024—the year FSD became widely available—tracking such incidents remains crucial. For investors, Tesla’s valuation hinges on its autonomous ambitions, including Robotaxis and Optimus robots in 2025. Whether the company delivers or faces setbacks from safety concerns will be key. Featured image via Shutterstock