Elon Musk's Unfinished Projects Tied To Tesla's Stock Plunge, Says Investor Ross Gerber: 'Just Coming Down To Earth To A Much More Reasonable Valuation'

The shares of electric vehicle heavyweight, Tesla Inc TSLA, have seen a significant drop, largely due to CEO Elon Musk‘s many unfinished projects and escalating competition.

What Happened: Tesla is dealing with several issues including a growing competition, noted investor Ross Gerber. The company has been scrambling to stay ahead of competitors like BYD in China, even resorting to considerable price cuts on certain models, reported Business Insider.

As per the China Passenger Car Association, Tesla’s China sales last month plummeted to 60,365 vehicles, marking the lowest since December 2022.

Gerber indicated that the international competition is distracting Tesla from other projects. “Investors are revaluing Tesla more as a hardware company than a software company because they are having to resort to all the levers that car companies do to increase demand,” Gerber told CNBC.

See Also: What’s Going On With Tesla Stock Tuesday?

“Those are the brand levers that gave Tesla its premium. And between Elon’s behavior and the lack of completion to a lot of these projects, Tesla is just coming down to earth to a much more reasonable valuation, to where it kinda should be.”

Among Musk’s unfinished projects is the yet-to-be-completed full self-driving technology, which Gerber sees as crucial for boosting the company’s value. Musk has even threatened to divert AI projects from Tesla if he couldn’t secure 25% ownership of the company – a demand previously described by Gerber as “delusional”.

Why It Matters: Just a day before, Gerber voiced concern about Tesla’s falling earnings despite higher sales. Analyst Daniel Ives also noted that Tesla was going through a “brutal transition,” as the company’s conference calls had become comedic.

Jim Cramer, host of CNBC's "Mad Money," commented on Tesla's stock slump, attributing it to weak shipment numbers in China and a temporary shutdown of the company's German factory.

Morgan Stanley analyst Adam Jonas cut the target price for Tesla, citing several problems including dwindling EV demand, older product lineup, and heavy competition in China.

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