【Elite Forum】Why Did Tesla Stock Plunge and What’s the Future Outlook?

In the United States, a leading company emerges every period of time. In the 1990s, it was Microsoft; after the year 2000, it was Google, and around 2010, it became Apple. However, in recent years, Tesla has become one of the prominent stars in the USA. Five years ago, Tesla’s stock was only around $20-30 per share. By December 2024, it had skyrocketed to $480 per share, a twenty-fold increase over five years, making it a global star company.

However, starting from February this year, Tesla’s stock began to decline, dropping to a low of just over $220, more than halving its value. The significant drop in Tesla’s stock price, is it due to political reasons or issues with its profitability? How much potential does this star company really have in the future?

Independent TV producer Li Jun stated on the NTD Elite Forum program that Tesla’s stock has been on a roller coaster ride in recent months. The stock hit a low of $138 in 2024, then surged to $480 by the end of December after Donald Trump was elected. However, starting in February and March this year, it started to decline again, hitting a low of $215 on March 10, plummeting by nearly 55%. Over the past two weeks, it has rebounded from $215 to around $280, marking a fifteen percent increase.

Looking at Tesla’s stock trend over the past three years, the $480 at the end of last year was indeed inflated due to Trump’s election win. The price range of $200-300 is actually a more rational valuation. Li Jun is optimistic about Tesla’s future.

According to a report by Business Insider on March 18, about 8.5 million shares of Tesla stock were shorted in the past 30 days. Short sellers have made substantial profits from the stock price decline. On March 10, when the stock plummeted by 15% from $280 to $215, it was considered a day when short sellers made a concentrated effort. However, a reversal began on March 12 as Trump publicly supported Tesla, live-streaming from the White House, prompting many Americans to start buying Tesla and its stocks.

Li Jun mentioned that recently, Musk has given many interviews discussing why he supports Trump and why he’s involved in the government’s efficiency department. He believes that the United States is on the brink of danger, so he is stepping up to help Trump steer America back in the right direction. It is truly admirable that the world’s richest man can contribute in such a way.

Renowned media figure Guo Jun stated on the Elite Forum that in the past month or two, Tesla’s sharp decline is closely related to the political climate. There are groups in the US and Europe specifically targeting Tesla, its cars, and owners, mainly left-wing organizations. Reports from Fox News suggest that these groups have ties to the Soros family.

Soros, in his book, argues that the world cannot be governed unless there is a global central bank backed by a global government. Looking back, it aligns perfectly with the leftist ideology. Despite sounding somewhat humorous, it is thought-provoking. The global leftists hype up climate change and demand major energy policy changes, aiming to drive gasoline cars out of the market. Therefore, those who previously supported Tesla the most were leftists, but now, the biggest opponents of Tesla are also leftists. The right-wing, who previously did not care much about climate change, is now in support of Musk. This shows that human political activities are often not rational and logical.

Guo Jun mentioned that Tesla’s stock decline is not solely due to political factors. Tesla achieved profitability for the first time in 2020, with a net profit of $721 million that year. By 2023, the net profit reached $14.997 billion, with a three-year compound growth rate of 175%, showcasing explosive profitability growth. However, in 2024, Tesla’s net profit saw a significant decline to just $7.1 billion, down by 53%, including gross margin, pre-tax profit also decreased by 1%. Especially concerning Tesla’s most crucial product, electric vehicles, while the sales volume remained, the sales revenue decreased by 6%. This is one of the main reasons for Tesla’s stock market decline.

Musk has stated that Tesla will truly enter an era of explosive profit growth in the coming years, with profits expected to increase tenfold within five years, reaching a net profit of $50 billion by 2030. Musk recently spoke at a Tesla employee meeting, urging everyone to continue holding onto the company’s stock. He believes that Tesla’s true high-growth period is on the horizon.

Former Chinese billionaire Zhao Haitao expressed on the Elite Forum that Tesla is not just a company; one should also consider Elon Musk. Musk and his current industries, in addition to Tesla, include Starlink, SpaceX, Neuralink. Only Tesla has gone public among these four main sectors presently. Therefore, in Zhao’s view, the company has significant potential for development, even though Chinese company BYD has surpassed Tesla in sales and profits, becoming the global leader in electric vehicles. Nevertheless, Zhao believes that Tesla surpasses BYD for several reasons.

Firstly, in the field of Autonomous Driving and FSD (Full Self-Driving), Tesla has no global equal. Its algorithms are excellent, essentially creating a process from 0 to 1. Furthermore, its high corporate confidence is showcased by making all its autonomous driving algorithms open-source. Due to its open-source model, China’s large-scale advancement in autonomous driving has only developed from 1 to 10 based on Tesla’s foundation. Without this open-source approach, China’s progress would have been much slower.

Secondly, Tesla’s entire vehicle manufacturing structure is open-source, allowing anyone to use it. This self-confidence stems from an entrepreneurial mindset. As a businessperson, Zhao appreciates Musk because of his great ambition. Musk shows concern not only for Americans but also for global scientific and technological innovation, providing welfare for people worldwide. Musk is a figure that Zhao respects, and thus he also has high regard for Tesla as a company.

Furthermore, Tesla’s technological prowess is incredibly advanced. What it has showcased so far is only the tip of the iceberg. It dares to be open-source, meaning there are many more successful inventions and even more advanced developments in progress.

The successful inventions can be further developed into the second and third generation of products in the future, thereby leading the industry from 0 to 1 continuously. Therefore, Tesla maintains perpetual innovation – how can a company with such innovation be brought down by temporary challenges or simple political factors? The capital market has never been afraid of genuine challenges. Like the real estate market, if house prices fall, but you are not selling, how does it affect you? Whether the stocks decline, if you are not trading stocks to gain profits, then you are not affected. Tesla faces no such financial risks.

Zhao emphasized that short sellers are only a part of Tesla stockholders and have been impacted significantly. Regardless of how short sellers manipulate Tesla’s stock, it does not pose significant harm to Tesla as a company, thus not hindering its sustainability. The current decline in stock prices is mainly due to political factors – people are capitalizing on the negativity surrounding Trump, particularly those who were fired or the capitalists behind the scenes who heavily shorted Tesla. They aim to profit from this situation. Those institutions that specialize in shorting did not have the opportunity to short Tesla, so they seized this moment to profit. However, it is merely a way for them to make money; it does not affect Tesla as a company.

Zhao pointed out that Tesla and Chinese company BYD are two different entities. Tesla is a tech-based company, with its most essential product being AI-driven autonomous driving. Looking at its current user base of 5 million vehicles, nearly 60-70% opt for FSD continuous subscription. This highlights the widespread recognition for Tesla’s technology and its AI-driven driving system. Once it reaches a user base of 7 million vehicles, with a $99 monthly subscription fee, the profit margin will be substantial – this comes from its software side. Therefore, as long as Tesla maintains market dominance and its tech remains innovative, these subscription revenues will be very lucrative, especially in terms of technological advancements where none can surpass it.

Moreover, the power generation and storage industry is erupting. In the US, many have installed Tesla’s energy storage batteries alongside solar panels, as the US government mandates new housing to have energy storage, integration of rooftop solar panels along with energy storage, showing a vast market potential in this sector.

Tesla is discreet, and those aware of Tesla products simply place orders on its website, leading to a significant surge in orders and a substantial increase in profit margin. However, this is just the tip of the iceberg; Tesla has not engaged in extensive marketing efforts – this reflects Tesla’s thorough strategic layout. The technology used in its electric vehicles and energy storage batteries must remain in sync. Future updates in energy storage technology will also lead to advancements in electric vehicle battery storage and power technology.

Tesla serves as a foundation for R&D in this area, propelling two sales departments’ synchronized growth. It represents an ecosystem that aligns with the future of technological development, presenting a significant market in this aspect.

Guo Jun highlighted that power generation and energy storage are two distinct industries. Tesla’s power generation primarily involves solar energy, converting sunlight into electricity using solar panels. Energy storage, especially, is crucial. Presently, the global competition is fiercest in this new battery technology and manufacturing sector, an area where Tesla leads, particularly in battery pack technology and distribution.

In 2024, Tesla’s sales volume of power generation and energy storage equipment grew by over 60%, from $6 billion to $10 billion. By general estimates, the US market is expected to reach a value of $400 billion in the next five years, with a global estimated value of approximately $200 trillion, illustrating immense potential.

Apart from this, robots also represent a potential value for Tesla. The core technology of Tesla’s electric vehicles is Autonomous Driving, where the automatic recognition and decision-making processes are implemented by machines. This core concept also applies to the manufacturing sector of robots.

In the future, robots fall into two major categories: industrial robots for automated machinery manufacturing and humanoid household robots. Industrial robots’ manufacture, renowned in Japan and China, relies on predesigned programs that machines follow. This concept is known as specialized automation. In the face of a labor shortage in the future, the importance of robotics in manufacturing will increase significantly, especially those robots capable of adapting work objectives based on specific circumstances. Therefore, Tesla’s autonomous identification, decision-making, and operational systems will become increasingly important.

The other major use of robots is in domestic household robots, especially humanoid robots. It is estimated that in the next decade, millions of humanoid robots will enter households globally, constituting an industry worth billions of dollars. Musk even mentioned that in the future, the number of humanoid robots might surpass that of humans. This concept, too, is based on AI-driven autonomous recognition, decision-making, and operational systems.

Currently, the world’s best performing and most technologically mature humanoid robots are Tesla’s Optimus, produced at Tesla’s Fremont plant in California. This year, full-scale production of humanoid robots, the second-generation Optimus, is set to begin, with the production of 5,000 to 10,000 units this year. The real exponential development will occur in 2026.

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