Elon Musk has returned to bashing the GOP budget bill in recent days, and in doing so, has reignited his fight with President Donald Trump.
In one long-time investor’s view, it’s bound to create even more challenges for the company, which just reported another quarter of weak vehicle deliveries.
Ross Gerber, the CEO of Gerber-Kawasaki Wealth Management and an early backer of Musk’s car company, said he believed the Tesla CEO’s fight with President Donald Trump was another overhang for the company.
Tesla shares are down 22% year-to-date. Gerber thinks that while the feud is bad news, the company is also struggling against a lofty valuation and uncertainty in its various business units, including core auto sales, but also initiatives like robotaxis.
Gerber speculated that the stock could fall as much as 50% if the market revalues Tesla. The stock was trading around $316 on Wednesday.
“People are just, you know, done with it,” Gerber said, speaking to Bloomberg about the Musk-Trump feud on Wednesday. “So this is just another, like, nail in the coffin — which I tweeted — that really is going to hurt Tesla, and I’m very upset about it,” he added, referring to a post on X where he called Musk’s shots at Trump on social media an “absurd attack.”
Musk reignited his fight with Trump over the Republican tax and spending bill this week. Tesla shares dropped more than 5% on Tuesday after Trump suggested DOGE should look into canceling contracts with Musk’s companies.
Gerber added he believed Musk had “destroyed” his image.
“You’re at this kind of point where it’s like, ‘What is this guy doing?’ You know? You’re supposed to be selling cars and robotaxis, and instead we’re fighting with the President of the United States. Which he enabled and helped empower, but, I’m sorry Elon, President Trump is way more powerful than you.” “he said. “So it’s just — quite frankly, it’s stupid.”
The damage is coming at a critical time for Tesla. The EV maker reported on Wednesday that its vehicle deliveries dropped 14% year-over-year in the second quarter. Sales have also plunged 45% in the European Union from January to May so far this year, according to data from the European Automobile Manufacturers’ Association released last week.
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Recent price increases on Tesla vehicles have also likely weighed on sales, Gerber said, adding he believed there was a “severe” supply-demand imbalance for Tesla cars.
“Making the car more expensive means less people will buy it. It’s as simple as that. And they already have a hard time selling the car,” Gerber said.
Gerber said he believed Tesla’s stock price wasn’t justified. The company is trading around 150 times earnings, around three to four times the price-to-earnings ratio of other mega-cap tech firms, like Nvidia and Google, Gerber said.
Gerber said his firm’s exchange-traded fund completely sold its position in Tesla stock this week, though Gerber-Kawasaki Wealth Management still has around $60 million invested in Tesla among accounts it manages for its clients.
The firm has been steadily selling its position in Tesla for more than two years, according to regulatory filings.
Gerber said he also continued to hold a small personal stake in Tesla, due to the stock being “one of the best trades” of his life as an early investor.
“What’s the justification for this valuation? Robots and a robotaxi that doesn’t really work. It just seems like there’s a big disconnect there, and eventually this reckoning will come,” he said.
