In the realm of electric vehicles, Tesla once stood as a beacon of innovation and disruption, with Elon Musk enjoying almost unblemished trust from investors and consumers alikeYet, the faith of some of its most ardent supporters has begun to waneRoss Gerber, an early investor and the CEO of Gerber Kawasaki Wealth & Investment Management, embodies this shift in sentimentThis once-glowing belief in Tesla's future has now turned into a deep concern.

Gerber's unease is palpable as he publicly criticizes the company’s trajectoryIn an unexpected move, he slashed his Tesla holdings by 31% in 2024, leaving him with 262,000 shares worth approximately $106 million at the end of last yearHis predictions are stark; by 2025, he foresees a potential plunge in Tesla's stock price by over 50%. This speculation seems to be grounded in reality, particularly as the stock has already seen a nearly 11% dip from the start of 2025.

In an interview with Business Insider on the 22nd, Gerber outlined four fundamental reasons behind his bearish outlook on TeslaEach of these reasons reveals a layer of vulnerability that he believes could lead Tesla into a severe crisis: challenges with autonomous driving technology, Elon Musk’s divided attention, a slowdown in sales growth, and a troubling high valuation.

Challenges in Autonomous Driving Technology: A Major Setback

Gerber emphasizes the belief that Tesla’s autonomous driving ambitions are fundamentally flawedIn a bold critique, he argues that Musk's aspirations to launch a fully autonomous taxi network in Austin this June are overly ambitious and unlikely to materializeUnlike competitors such as Waymo, Tesla relies entirely on cameras for its self-driving technology, eschewing the use of LIDAR sensors, which Gerber contends is crucial for ensuring safety and reliability.

He asserts, "We are seriously lagging behind in the autonomous taxi and driving arena," pointing out that Waymo's approach is decidedly more secure

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In his view, the absence of LIDAR presents an insurmountable obstacle for Tesla's full autonomy goals. "I now believe that to have a sufficiently safe fully autonomous driving system, LIDAR is necessaryUnless they change their hardware, they will hit a power ceiling," he stated emphatically.

Musk’s Divided Attention: The Shift to AI

Another factor weighing heavily on Gerber's mind is Elon Musk's divided focus among his several ventures, including SpaceX and xAIThis spread of attention, he argues, detracts significantly from Tesla's potentialIn recent months, Musk seems to have redirected much of his energy towards artificial intelligence, leaving Tesla's priorities vulnerable.

Gerber notes, "He (Musk) is putting 100% of his energy into AI, which actually harms Tesla more than it benefits xAI and other businesses because he is no longer working on Tesla." Gerber believes that if Musk were to dedicate himself solely to the advancement of Tesla’s autonomous driving technology, it would bolster his confidence in the company’s prospects.

Sales Growth Slowing: Increasing Competition and Brand Damage

Though investors have high hopes for Tesla's advancements in self-driving technology and robotics, the company finds itself facing core challenges of declining growth in sales—a striking contradiction to the company's innovative imageThe year 2024 marks an ominous first for Tesla, as electric vehicle sales are set to witness an annual drop.

Gerber warns that the increasing competition from other electric vehicle brands poses substantial threats, particularly outside the United StatesData released by the German Automotive Industry Association underscored the rapid decline in Tesla's registration figures in Germany, plummeting by 60% in January aloneComparable downturns have also been noted in France and Norway, where sales decreased by 63% and 38%, respectivelyThis competitive environment compels Gerber to reevaluate Tesla's standing.

High Valuation: The Unsustainable Premium

For a considerable time now, Tesla's market valuation has occupied a lofty perch above other automotive and tech titans

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