$TSLA: Investor Urges Focus on Core Business Amidst AI Pivot

## Catalyst Analysis: Investor Skepticism on Tesla's Pivot and SpaceX Merger Investor Ross Gerber has publicly criticized Tesla's strategic shift away from its automotive core towards AI and autonomous driving. Gerber argues that Tesla could significantly increase its vehicle sales, potentially doubling them, by re-emphasizing its car manufacturing business. This sentiment emerges as North American EV sales experienced a 27% decline in July, contrasting with a 9% global sales increase driven by Europe. Gerber also conveyed skepticism regarding Elon Musk's multi-trillion dollar revenue forecasts for SpaceX, questioning the timelines and feasibility.

### Impact on Tesla ($TSLA+WL) Gerber's viewpoint directly challenges Tesla's current strategic direction, which prioritizes AI, autonomous driving, and robotics. His dissatisfaction stems from perceived delays in full self-driving capabilities and a failure to meet past production targets, such as the previously stated goal of 20 million cars annually. The investor suggests that Tesla's stock price may not reflect a fair valuation if a potential SpaceX merger were to occur, proposing SpaceX as a potentially stronger investment at this time.

### Winners, Losers & Uncertainty Gerber's commentary suggests a potential divergence of interests between long-term Tesla shareholders focused on automotive growth and those aligned with Musk's broader ambitions in AI and space. The uncertainty surrounding a possible SpaceX-Tesla merger is highlighted, with Gerber suggesting potential dilution for SpaceX shareholders if it were to acquire Tesla at its current valuation, while Tesla shareholders might expect a premium. The differing forward P/E ratios (150 for Tesla versus 80 for SpaceX) further complicate any potential merger scenario.

### Risk Watch — Legal/Timeline While Gerber's comments reflect an investor's perspective, they underscore ongoing debates about Tesla's strategic focus and valuation. The timeline for achieving full self-driving capabilities and the success of Robotaxi services remain key areas of investor scrutiny. Any potential merger between SpaceX and Tesla would require careful consideration by the boards of both entities to navigate valuation discrepancies and shareholder interests.

### Story Arc / How We Got Here Elon Musk's tunneling venture, The Boring Company, is reportedly seeking to raise approximately $4 billion at a $20 billion valuation, a significant increase from its $5.7 billion valuation in 2022. This move underscores the growing private empire Musk is building outside his publicly traded companies like Tesla and SpaceX. While these private ventures aren't directly investable for most, they form an integral part of Musk's broader business ecosystem, potentially impacting his public entities through future acquisitions or strategic integrations. Monitor developments in Elon Musk's private ventures as they may influence his public company strategies. Prior coverage: [Elon Musk's Boring Company Nears $20 Billion Valuation in Funding Round](/explore/elon-musks-boring-company-nears-20-billion-valuation-in-funding-round).