Name: It’s Over For Tesla - Tesla Stock is Melting Down
Uploaded: 2025-08-14T18:15:13.000Z
Duration: 20 min 23 s
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To-infinitive

Things are about to get a lot worse for Tesla.

Over the last 6 months, the price of Tesla's stock has dropped by about 50 percent, but it seems like that's just the beginning.

Future simple

In fact, the entire empire of Elon Musk is crumbling right now, and if Tesla crashes, that is going to wipe out his entire net worth because most of his net worth comes from his stake in Tesla.

When the people who sit on the board of directors of Tesla sell 100 million dollars worth of Tesla stock, tells you a lot about the state of the company.

They did not sell those stocks 6 months ago when Tesla was at its peak, they sold them when Tesla was already down by around 50 percent.

Even his brother, Kimbal Musk sold around 27 million dollars worth of Tesla stock over the last 6 months.

So let's try to figure out what exactly is happening with Tesla, how low Tesla can possibly go, and is there a chance for Tesla to survive this crisis and start growing again because Tesla still remains one of the most valuable companies in the world.

So if you are ready, give this video a thumbs up and let's dive right into it.

Just when we thought that it can get worse for Tesla, BYD came out, which is a Chinese car company and beat Tesla at sales.

Tesla's sales for the last year were at around 100 billion dollars, which is pretty much a lot of money, with a net income of around 7 billion dollars, but BYD surpassed that with 107 billion dollars worth of sales.

Of course, we have the revenue over here in Chinese Yuan, but if you convert that based on the current exchange, it's gonna be around 107 billion dollars, with a net income of 5.5 billion dollars.

So if you have a car company in China, where the market is much smaller than the United States, and they beat Tesla there, what do you think they can do to Tesla if the tariffs will be lifted and Chinese electric cars will be sold in the United States, they will wipe out Tesla in an instant.

And that is probably the greatest fear that Tesla ever has, because they cannot possibly compete with a company like BYD.

Especially if you open up and take a look at their prices, you quickly realize that BYD cars are a lot cheaper than Tesla cars, even though Tesla slashed prices slightly over the last couple of months, they still cannot possibly compete in price when it comes to BYD.

In fact, if you look at the numbers, BYD has surpassed Tesla in the number of cars that they sell back in 2023, so this is not something new, this was something like investors actually expected from Tesla over the last couple of years.

Because even though that if you go back like 10 years ago, the difference was absolutely massive, where Tesla was this cool electrical car company that dominated the entire world, they started opening gigafactories everywhere, not just in the US, in Europe, China.

In fact, for some time, they dominated the entire Chinese market, it's literally just the last couple of years that Chinese manufacturers literally jumped over, and the difference right now is so huge that Tesla has no chance to compete with BYD.

BYD last year sold 3.5 million cars in China, and Tesla sold a little over half a million cars, and right now they are not the second car company or the EV company in China, they are literally the third EV company, and chances that Tesla is going to go from half a million cars to 3.5 million cars in the next couple of years is just impossible.

If they do that, they might be able to do that worldwide in the next 5 to 10 years, but certainly not in the next 2 years, but BYD is not simply going to sit down there and watch how Tesla is catching up, BYD will continue to grow and maybe their sales are going to double to 6 and 7 million cars, and that raises a lot of questions for investors.

So if we are going to give the pretty similar valuation to Tesla as we are giving to BYD, then it's certainly overvalued.

The market cap of BYD is around a trillion dollars, so if you convert that to the US dollars, that's around 160 billion dollars, but the market cap of Tesla which has less sales than BYD is around 825 billion dollars, and that is after a 50% drop over the last 60 months, so I did speak it was used to worth like 1.2 or 1.3 trillion dollars, probably even a bit more than that.

So if we are going to give Tesla the exact same valuation as we are giving BYD, which is at a PE ratio of 27, the price of Tesla shares right now should be 56 dollars per share and not 263 dollars, and the market cap should be 175 billion dollars.

If you are actually looking at Tesla purely from the factual numbers and you are literally taking a look at the sales and you are taking a look at the revenue, you clearly can see that either BYD should worth at least around a trillion dollars just as much as Tesla, or Tesla should actually be devalued to around 160 billion dollars.

Imagine you have such an overvalued stock and then you have such a crisis that Tesla is running right now, where they are burning Tesla cars, where Tesla sales are going down everywhere, where there are tariff wars that are being waged with the United States, with That is going to make the cost of producing Tesla much more expensive, that is driving the Tesla sales way down.

In the European Union, Tesla sales are already down by around 45% in the last couple of months since Elon Musk started allying himself with Trump.

Because Trump is literally just waging wars with the European Union, and since Tesla is an American car company, and Elon Musk is the closest ally of President Trump, guess who is suffering out of this trade war that Trump has started?

The second largest market after the United States for Tesla is obviously China, and sales in China are also down by around 50 percent, which means that Tesla is on a trajectory to go down.

Why are we overpaying so much for a stock where its sales are going dramatically down.

I know all of this talk about that Tesla is not just a car company, obviously it's doing AI with its self-driving technology, it's trying to build robots, it's trying to create software, it's literally trying to be everybody.

But if you look at the core principles or the core products that Tesla is making, it's a car company, so if you give it that kind of a valuation where you have a car company whose sales are plummeting dramatically by around 50%, then think about the real valuation of Tesla.

Tesla cannot possibly sell their cars everywhere, it's either China, it's the United States or the European Union.

You can't sell Teslas in Africa or most of the Asian countries, and that's simply because Tesla cars are expensive.

What are you going to buy, a BYD car or a Tesla car, a BYD car that costs 15K or a 40K Tesla.

So if you have some kind of an Asian country that has pretty similar trade deals with China and the United States, which of them are you going to buy, a 40K Tesla or a 15K BYD car.

Yes, there are some people who can afford that, but not the vast majority of people.

So when you are losing your two largest markets in the world, you are literally headed into a real bankruptcy.

And if you look at those two markets, where Tesla has the largest market share and the largest chance to actually dominate those markets, then there are actual competitors who can easily replace Tesla.

The European Union, yes, Tesla is still leading, but their sales are plummeting, and probably by the end of this year, Tesla is no longer going to lead the European market.

But after that, we have BMW, whose sales are very close to Tesla, and they will pretty much by the end of the year are going to catch up.

Especially when there is this trade war is happening and Trump imposed like a 25% tariff on all cars that are coming to the United States, and the European Union is going to retaliate pretty much with the exact same tariffs, I haven't seen the retaliation yet, but it's going to be pretty much close to that.

You will easily find out by the end of the year, BMW, Mercedes, Volvo, or Volkswagen overtaking Tesla.

And also because there is so much negative sentiment around Tesla, people in the European Union will stop buying Teslas to show their signs of disagreement with the United States and in Tesla with particular because they don't simply like Elon Musk.

The same story repeats with China, but it's a lot worse because BYD have already overtaken, and right now they have superchargers that charge their cars 4 times faster than Tesla.

Why are you going to buy a Tesla when you can simply charge your BYD 4 times much faster, you don't have to waste so much time actually charging your car.

And a combination of these factors are leading investors to think that or believe, if Tesla sales are going to keep plummeting, and by the end of the year, Tesla sales are not going to be like 97 billion dollars, but maybe 70 billion dollars or 60 billion dollars, and the way that investors act, they are not acting on the fact that they believe is happening today, they act believing what is going to happen in the foreseeable future.

So all these factors are pushing people to actually sell their stocks, believing that Elon Musk's empire is going to plummet, it's going to go down, so maybe I should exit my position before the situation gets a lot worse.

Especially when you know that the stock is clearly overvalued, there is literally no question about it, the stock is purely hanging on the fact that Tesla one day is going to be super profitable based on the promises that Elon Musk has made, and that could turn into a self-fulfilling prophecy that could lead more investors to sell their stocks just like in the last couple of months where the people who are on the board of Tesla are selling their stocks.

Elon Musk literally himself urged Tesla employees not to sell their stocks.

All of this sounds like Tesla is going to collapse in the foreseeable future, however if you dig into the numbers, it's not literally as bad as it seems for Tesla, and if you actually look at the real numbers and the real prospects, Tesla still has a chance to actually grow way faster than BYD, at least if we are talking about the sales and revenue and actual profit that a company can make.

For 2024, the total number of EV sales in the United States represented around 9 percent, so just 9 percent of all the car sales in the US were EV sales, and over half of those sales were sales done by Tesla, it was followed by all other manufacturers.

And if you actually look, none of them actually presents a real competition for Tesla in the United States.

You have Chevrolet, you have Toyota, you have BMW.

Now by Trump imposing tariffs, these 3 cars will lose their edge in the United States and Tesla sales are probably going to skyrocket even further.

Now, some people will say, oh nobody is going to buy Tesla right now, look at the situation, look how negative people are actually looking at Tesla.

Especially if you look at the core idea of Tesla, Tesla emerged as the car that is fighting against climate change, that was the prospect, that was literally the idea behind it, and Tesla sales initially grew in California where people are liberal, where we have democrats controlling the state, and this is where the sales of Tesla cars have skyrocketed, but that's no longer the case because Elon Musk is aligning himself with Trump, and Trump is a republican and he is doing everything against what democrats believe, especially in California.

But that's part of the story, because if you wanna look at where Tesla is headed to, you have to take a look at the bigger picture and you have to look at it much more strategically instead of literally looking at day to day events.

If you look at the sales in China, half of the cars that are being sold in China last year were all EVs, literally, that is 5 times more than the United States, it was 9 percent in the US, it was 50 percent in China, and most of these sales were done by a company called BYD that we just talked about.

The problem is that, in the next couple of years, lets say in the next 2 years, 100 percent of all the cars being sold in China are going to be EVs, and BYD will be able to double their sales, if they double their sales, their sales are going to be 214 billion dollars, which is literally a lot, and it is going to increase their valuation probably to something like 400 billion dollars, maybe more than that, and their income is going to be 11 billion dollars.

And chances of that happening is pretty high, especially when you have the Chinese government so aggressively pushing and incentivizing those companies to actually invest and build and turn the entire China into EV cars.

Lets compare that to what is happening in the United States, and that is where you understand the completely different story.

If the United States is also going to be fully electric, and 100 percent of US car sales are going to be electric, just like we just assumed with China, then Tesla sales most likely are going to increase by at least 10 times.

There isn't a single company that can replace Tesla, even if you hate Tesla, even if you hate Elon Musk, because there isn't a single company in the US that is positioned to build their cars so efficiently in the United States as much as its being done right now with Tesla.

And if Tesla sales are going to grow at the exact same rate, that means that they are going to 10x their sales, that will bring it to almost a trillion dollars worth of sales and a net income of 70 billion dollars.

So even though that BYD has surpassed Tesla a lot, they are much less profitable because they sell their cars at a significant loss, and secondly, they have already captured 50 percent of the entire market of China, where 50 percent of all the cars that are being sold are electric, whereas in the US, there is still a lot of room to grow, there is still a way to go from 9 percent to 100 percent.

Even by the time that the US EV sales are going to go from 9 percent to 50 percent, Tesla will sell much more and will make a much bigger profit than BYD regardless, even if all the sales are simply going to be in the US and not outside the US, even not in the US market right now in the next couple of years is much bigger than BYD can possibly imagine.

I am not saying that Tesla will 100 percent capture the entire market, that might not happen, of course, there is a good chance that Tesla is going to keep plummeting, but if you look at the factual numbers, if you look at the situation in the market, if you look at the factories, you will realize that Tesla does not have competition, they control over 50 percent of the entire market.

And for those car companies to compete with Tesla, they have to spend a couple of billions of dollars to build those plants, and it's going to take them a bit longer, it's going to take them a couple of years, just like it took Tesla.

And also Tesla have mastered building gigafactories, something that is going to take a lot of couple of years at least for those car companies to do, they also need to raise billions of dollars to do that, especially when the dynamic of the market is changing, and the 70 billion dollars that we talked about is simply based on the situation that we have on the ground.

There is also a lot of potential for Tesla to make billions of dollars from robotaxis, they haven't yet started selling their robotaxis, which is going to cost 20 billion dollars, and they will make a lot of money from AI and automation.

Tesla is also an energy company, Tesla is also an AI company, they can also sell their insurance.

There is a lot of potential for Tesla to grow, and if they actually capture 50 percent of the entire market, when the United States is going to transition entirely to electrical cars, just like China is doing right now, the potential for Tesla is much bigger than BYD can possibly imagine, or even all of the Chinese EV car companies combined.

Even though the tariffs are hurting all car companies, the clear winner of tariffs are Tesla.

Because Tesla cannot sell their cars everywhere, they are either going to sell them in China where they have a real market, the European Union, and the United States.

But the biggest market for Tesla or any car company or any brand in the world is going to remain the United States because this is when you have the wealthiest consumer.

If Tesla solely is going to operate in the United States, it is still going to be much more profitable than any other car company can possibly dream about, even if that car company can sell in China and the European Union.

Now, European Union is not going to allow cheap Chinese cars to come into European Union because they will drive out of business BMW, they will drive out of business Audi, and the rest of the auto manufacturers in the European Union.

But with tariffs happening over here, European countries or brands will not be able to sell their cars in the United States because they will have to pay a 25 percent tariff.

And for Tesla, United States is a much bigger market than European Union can possibly be, so the entire market in the United States will be at the mercy of Tesla.

And over the next couple of years, as other companies will be spending let's say billions of dollars to build their plants, Tesla is going to keep capturing more market share, and probably like in the next couple of years, they might actually have not just 53 percent of the market just like they have it right now, it might even go to 70 percent.

And if the percentage of sales of EVs in the United States is going to skyrocket, let's say they are going to double for example, that's a hypothetical example.

Of course, we are looking into a future where every single car is going to be an EV, maybe not every single car, but something closer to 70-80 percent.

So if China is going 50 percent EV, the United States will at least go 50 percent EV, maybe not 100 percent, so there is a very good probability that Tesla sales are going to grow at least 5 times over the next couple of years as this transition is happening.

Those car companies don't stand a chance to compete with Tesla, and all the great brands from pure union will not have that chance, the Chinese brands will not have that chance, that is why probably if you actually zoom out and take a look at everything strategically, you find out that Elon Musk actually made the right bet because he is going to win from these tariffs.

These tariffs are going to make Tesla insanely rich.

I'm probably going to get a lot of hate for saying this because a lot of people don't like Elon Musk because he is aligning himself with Trump, but I'm not here trying to pick sides, I'm not saying that I like Elon Musk or I like Tesla or I hate Tesla, I'm not saying all of this, I'm simply saying that this is the situation in the market.

These are the tariffs, these are the implications of the tariffs, this is the car brands that we have.

We have Tesla that has 53 percent of the market, then we have Ford, we have GM and other car brands.

And over the last 10 or 15 years, they haven't done anything that is close to Tesla.

And right now, because of these tariffs, they will have to spend dozens of billions of dollars to restructure their entire business model in the United States.

And I'm not even talking about them building their electric cars in the United States affordably and compete with Tesla.

They have other priorities, they will have to spend billions of dollars to bring those factories from Mexico and Canada and China and the rest of the world to the United States and sell the cars where they have the highest demand that make them actually real profits.

And the car company is not a profitable business.

Car companies usually make 1 to 5 percent on every single car that they sell.

So it's not literally a glamorous business where they can actually just swallow the extra cost that is coming out with those tariffs.

So if you think about it strategically, if Elon Musk and Tesla is going to survive this crisis, there is a pretty good chance that Tesla's sales are going to skyrocket in the next couple of years.

Again, this is a crisis and anything could possibly happen within this crisis.

Maybe it is going to destroy Tesla, but if you think about it, Elon Musk actually took a strategic decision.

Yes, Tesla will suffer in the short run, but it seems like in the long run, if his bet is going to pay off, Tesla might worth a lot more than it's worth today.