Core Viewpoint - Tesla's stock has experienced significant volatility, currently down 47% from its all-time high, with potential for further declines due to challenges in its core business and increasing competition in the electric vehicle (EV) market [2][5][19] Group 1: Financial Performance - Tesla's electric vehicle sales, which account for 72% of total revenue, fell by 1% in 2024 to 1.79 million cars, with a more pronounced decline of 13% in Q1 2025 [4] - The decline in deliveries led to a 20% year-over-year drop in automotive revenue and a staggering 71% decrease in overall net income [5] - Tesla's current trailing 12-month earnings per share (EPS) is $1.74, resulting in a price-to-earnings (P/E) ratio of 148.6, significantly higher than the Nasdaq-100 index's P/E ratio of 27.1 [16][18] Group 2: Competitive Landscape - Tesla faces increasing competition from low-cost EV producers, particularly from China-based BYD, which offers vehicles starting at $10,000 [6] - The competitive pressure is compounded by a decline in consumer sentiment towards the Tesla brand, influenced by CEO Elon Musk's political involvement [5][7] Group 3: Future Prospects - Tesla plans to introduce lower-cost EVs later this year and Musk intends to reduce his involvement in government efficiency initiatives to focus more on Tesla [8] - The Cybercab robotaxi, designed for autonomous ride-hailing, is not expected to enter mass production until next year, delaying potential revenue generation [9] - Tesla's full self-driving (FSD) software is still awaiting regulatory approval for unsupervised use, which is critical for the Cybercab's operation [10] - Musk projects that the Optimus humanoid robot could generate $10 trillion in revenue over the long term, with production ramping up to over 1 million units annually by 2029 [13][14] Group 4: Valuation Concerns - Tesla's current valuation poses a significant barrier to potential upside, with the stock being five times more expensive than its tech peers [15][18] - A further decline of 50% or more in Tesla's stock price could be necessary to align its valuation with that of major tech companies, highlighting the risk of continued earnings pressure if EV sales do not recover [19]