Tesla(US:TSLA) The Motley Fool·2025-07-05 08:22Core Viewpoint - Tesla's true value may lie in its future product platforms, such as autonomous robotaxis and humanoid robots, rather than its current electric vehicle (EV) sales [1][10] Sales Performance - Tesla delivered 1.79 million EVs in 2024, marking a 1% decline from the previous year, which is the first annual drop since 2011 [5] - In Q1 2025, Tesla delivered 336,681 EVs, reflecting a 13% year-over-year decline [6] - For Q2 2025, Tesla delivered 384,122 EVs, also down 13% year-over-year, indicating a potential sharper annual decline in sales for 2025 compared to 2024 [6] Competitive Landscape - Tesla's sales in Europe fell by 40% in May, while the overall EV market in Europe grew by 26% [7] - Chinese EV brands have doubled their market share in Europe, presenting significant competition for Tesla [7] - Tesla's pricing strategy is challenged by competitors like BYD, which offers lower-priced models, making it difficult for Tesla to compete in key markets [8] Future Product Development - Tesla is focusing on its Cybercab robotaxi, which will operate on full self-driving software, avoiding a price war with competitors [9][10] - The goal is to have millions of Cybercabs generating revenue through passenger transport and small deliveries [10] Financial Implications - Tesla's total revenue shrank by 9% in Q1 2025, with earnings plummeting by 71% to $0.12 per share [13] - The stock is down approximately 34% from its peak, but the decline in earnings is more severe, leading to a high price-to-earnings (P/E) ratio of 173.4 [14] - Comparatively, major tech companies have an average P/E ratio of 35.4, indicating Tesla's stock may be overvalued [15] Market Outlook - If Tesla's FSD and Cybercab initiatives succeed, the current stock price may appear cheap in the long term, but regulatory hurdles remain [16] - Significant declines in stock value could occur if EV sales continue to drop or if the robotaxi business fails to gain traction [18]