It's not often that I recommend a Motley Fool article over a Lawyers, Guns & Money post, particularly not one by Scott Lemieux, but these are strange times.
The markets, in general, have been doing horribly as of late, but Tesla is in a class of its own. Yesterday, the stock slid more than 15%, bringing it down more than 40% year to date. Most of the coverage, including the LGM piece, has stopped there, and if that were the whole story, the situation wouldn't be as bad as it sounds for Elon Musk, whose fortune overwhelmingly depends on the value of Tesla stock. Even with the ugliness of the past couple of months, the stock is still up almost 25% for the year. I'm sure that as you read this, there are Musk fans out there arguing that things are just returning to normal after the spike that followed the news of the Musk-Trump alliance and that things will level off when the company goes back to trading on fundamentals.
There are, however, two numbers that most writers are ignoring—numbers that have very disturbing implications for investors in the company.
108 and 21.
Tesla is a mature company. If it were a person, it could legally buy its own drinks. It also, even after yesterday's drop, has a price-to-earnings ratio over 100. That's about four times as much as you would expect from a mature tech company like Amazon or Facebook. It's about ten times as much as you would expect from a car company. Tesla is still priced like a start up.
Musk tried to reassure investors by telling them he believed a 1,000% increase in profits was possible over the next five years. Even with the "possible" qualifier, this would be an awfully ambitious claim, even for a company that was doing well. But Tesla's vehicle delivery numbers actually shrank in 2024, and 2025 was already looking to be worse before the head of the company—and retroactive founder—aggressively started destroying the brand. The company has a tiny number of badly received new products in the pipeline. The market is becoming more competitive, particularly with the rise of BYD.
Now add on the branding disaster. Tesla owners are so embarrassed that they've been seen rebadging their once-trendy sedans and SUVs with the logos of other, less controversial carmakers. "Swastikar" is trending and producing some wonderful social media content—and some very pissed-off responses from fanboys. An ad campaign in Britain features the slogan: "Goes from 0 to 1939 in 3 seconds."
Musk's reaction may not be helping.
Unsurprisingly, Musk has disparaged Tesla Takedown as something astroturfed by wealthy liberals (and conflated the peaceful movement with attacks in which suspected arsonists threw Molotov cocktails at dealerships). On Saturday, he claimed without evidence on X that an “investigation” of some kind had revealed that wealthy philanthropists including George Soros, Reid Hoffman, and Leah Hunt-Hendrix were funding the groups behind Tesla protests through the Democratic fundraising platform ActBlue. Aside from misrepresenting how ActBlue works — it doesn’t fund anything but is rather a system through which donors can send money to Democratic political candidates and liberal organizations — Musk also pointed the finger at two more supposed financiers of Tesla Takedown, Herbert Sandler and Patricia Bauman, who died in 2019 and 2024, respectively.
[Hoffman's take on Musk is especially insightful.]
But perhaps the most remarkable/saddest part of Elon Musk's 1,000% growth claim is that even if he could do it, it would only bring Tesla's market cap in line with other auto manufacturers. It's a situation where you need to win the lottery just to break even.
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