Prediction: Tesla Stock Won't Recover in 2025 (And Insiders Seem to Agree)

Yahoo

a day ago

Two company insiders sold a combined $200 million in Tesla stock.
Tesla's Robotaxi service faces increased competition, and the company recently reported a sharp decline in vehicle deliveries.
Shares of Tesla are trading at a steep premium to their historical valuation.
These 10 stocks could mint the next wave of millionaires ›
Between Tesla (NASDAQ: TSLA) failing to meet the deadlines that Elon Musk sets and Musk's decision to split his time at Tesla with various other endeavors, many investors are losing confidence and questioning whether the stock can recover from its plunge in 2025.
But the actions of Tesla insiders are providing a clear indication. Two insiders have sold company stock -- a development that represents a glaring yellow light for those with shares of Tesla parked in their portfolios.
From Cathie Wood, who thinks Tesla stock will soar to $2,600 over the next five years, to analysts at Wedbush, which has a $500 price target, plenty see Tesla stock driving in the right direction.
Some (like Wood) think the launch of Tesla's Robotaxi business, a fully autonomous ride-hailing network, will be a considerable boon for the company. Musk claims the company is making steady progress toward launching the service, providing some insight in a recent post on X:
Others are encouraged by the news that Musk has chosen to refocus his attention on Tesla. Shares jumped on Thursday morning, for example, after investors learned that Musk had announced that he will be stepping back from his role in the Trump administration.
At this point, I'm unconvinced of the bulls' viewpoint. The argument that the company's Robotaxi business will soon drive significant growth seems overblown. While the company has started testing driverless Robotaxis in Austin, there has been significant damage to the Tesla brand, and customers' eagerness to embrace Tesla's Robotaxi service doesn't seem as strong a possibility as it did just last year.
Plus, there is stiff competition from companies providing their own self-driving taxi services. In addition to Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Waymo and General Motors' (NYSE: GM) Cruise, Tesla faces competition from private companies like Wayve.
Another pothole in Tesla's road to recovery is the company's declining deliveries. In Q1 2025, Tesla reported deliveries of 336,681 vehicles, representing a 13% year-over-year decline. While there have been court rulings deeming President Trump's tariffs unlawful, it's not clear what the future will bring. Also, customer demand may have been diverted by other electric car options.
Investors look all over for insight, but one thing they're particularly sensitive to is the trading activity of company insiders. When insiders buy stock, for instance, it's a pretty clear indication that they expect shares to rise in the near future. On the other hand, when they sell stock, it may mean that they see shares dipping in the near future.
Two prominent insiders have chosen to sell significant stakes of Tesla stock this week. Ira Ehrenpreis, who has served on the board of directors since 2007, sold 477,572 shares in a transaction valued at about $162,059,282, and Kimbal Musk, Elon's brother and one of the largest individual Tesla shareholders, sold 91,588 shares, totaling about $31,079,472.
Neither Ehrenpreis nor Kimbal Musk has offered an explanation, but it's possible the Robotaxi service isn't in such good shape as Elon suggests.
For some, there's not much more reading of tea leaves needed. Tesla's falling sales, the uncertainty around its Robotaxi service, and the recent insider transactions are all the material they need to decide it's best to watch Tesla stock from the side of the road.
For those still on the fence, there's also the stock's price tag. Shares are changing hands at 185 times forward earnings, a steep premium to the five-year average P/E of 95.5.It seems clear that it's best to keep Tesla stock at arm's length for the time being.
Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this.
On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $366,219!*
Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,589!*
Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $656,825!*
Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of June 2, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.
Prediction: Tesla Stock Won't Recover in 2025 (And Insiders Seem to Agree) was originally published by The Motley Fool