On May 4, Tesla's stock price plummeted 7.2% to $138.7 in early trading, nearly halving from the beginning of the year. The board of directors held an emergency special meeting to reiterate its support for CEO Elon Musk.
This battle to defend market value took place at a critical moment when the company's global deliveries dropped sharply by 20% in the first quarter of 2025 and its market share in China fell below 8%.
On May 1, 2025, local time, in San Diego, California, USA, people passed by the Tesla showroom.
In the same week as the board's statement, Tesla suffered a double blow from the capital market. S&P Global downgraded the company's credit rating to junk level, and the quarterly position report of institutional investors showed that giants such as BlackRock and Vanguard reduced their holdings by more than 40 million shares. According to FactSet data, the company's forward price-to-earnings ratio has shrunk from 200 times at its peak to 45 times, but this figure is still three times that of traditional automakers.
However, this valuation gap is not due to the market's optimism about Tesla, but is entirely based on Musk's personal commitment to autonomous driving. "Is Musk bigger than Tesla? The answer is yes," said Gene Munster, a Tesla investor and partner at Deepwater Asset Management. Data shows that Musk holds 13% of Tesla's shares, and the appointment of board members and super-high salaries are closely related to him.
Tesla is currently facing a financial crisis it hasn't seen in a long time. Its operating cash flow turned negative for the first time since 2019, at negative $890 million. The capacity utilization rate of the Shanghai Super Factory fell below 60%, and the Berlin Factory implemented a four-day work week.
After Musk announced his full shift to Robotaxi, a rare split occurred within Tesla. Three anonymous supply chain sources revealed that the bidding for parts for the $25,000 Model 2, which was originally planned to be mass-produced in 2025, has been suspended, which contradicts Musk's statement at the earnings conference that he would "unswervingly promote autonomous driving."
Although Chairman Denholm stressed that "Musk's vision is irreplaceable", the market is not buying it. Morgan Stanley estimates that of Tesla's current market value of $440 billion, more than $300 billion is priced in fully autonomous driving (FSD) and robotics businesses. However, the actual monetization ability of the FSD V12 system is questionable, with the activation rate in North America still hovering at 15%, and the monthly subscription fee of $199 is only one-third of what analysts expected.
In the Chinese market, local brands pose a growing threat to Tesla.
The latest data from the China Passenger Car Association shows that Tesla's retail sales in China plummeted 43% year-on-year to 32,000 vehicles in April, squeezing out of the top ten new energy vehicle sales. More seriously, the Shanghai factory's exports to the North American market fell sharply by 60%, reflecting the simultaneous shrinking of demand in Europe and the United States. Supply chain sources confirmed that Tesla has suspended additional orders for lithium iron phosphate batteries from CATL. This abnormal move was interpreted as an "extreme measure to clear inventory."
In the midst of the siege, Musk launched two radical operations. He mortgaged 10% of Tesla's equity to borrow $8 billion from SpaceX, and announced a $30 billion stock repurchase plan. Analysts pointed out that this capital operation of transferring money from one hand to the other is actually a blood transfusion for the development of Robotaxi and Optimus humanoid robots. It is worth noting that the robot production line secretly built in the Texas Super Factory has begun equipment debugging, which may be a key attempt for Tesla to get rid of the label of "car company".
In the center of the eye of the storm, Musk still maintains a delicate balance. He posted a photo on social media wearing a "Make AI Great Again" hat with the caption "The real war has just begun." As AI Day on August 8 approaches, global capital is waiting with bated breath to see whether this technology madman can stage another miracle of reversal.
