The turning point for Tesla
When the involvement of the world’s wealthiest individual is the primary explanation for the inflated valuation of a car manufacturer, the association of Nazi salutes with Tesla’s “Techno king” takes the brand into troubling new territory.
Elon Musk, at a rally for Donald Trump’s inauguration on Monday, appeared to make two gestures resembling the infamous Siege Heil salute, which the internet widely interpreted as such. Musk himself referred to the event as “a fork in the road of human civilization.” His open support for far-right politicians in Europe and his transformation of Twitter into a platform for extreme views paint him as something of a propagandist for the meme age. But from a financial perspective, the key question is how this affects Tesla’s $1.4 trillion market capitalization—not humanity at large.
As an investment, Tesla has long been more than just a car company. The “Tesla-financial complex” has become a market force, driven by massive options trading that elevates the company beyond its core business. Investors aren’t just betting on electric vehicles; they’re betting on Musk’s future vision—whether that’s self-driving cars, robot axis, or the proliferation of optimists in every home. Or they’re simply betting that the tech boom will continue unabated.
However, unlike cryptocurrencies or other speculative assets, Tesla is a real company making actual products and convincing consumers to spend large amounts of money on them. Yet, when Tesla releases its full-year results next week, it’s expected that the company’s performance won’t be stellar.
Tesla’s annual sales are forecast to rise modestly to $99.6 billion in 2024, up from $96.8 billion in 2023, but the number of units sold is expected to fall. Intense competition—especially from China—and declining prices for electric vehicles are putting pressure on the company. With a valuation more than 12 times projected sales, many on Wall Street consider Tesla too expensive, with only a minority of analysts recommending it as a buy.
Although many short sellers have long since abandoned their positions, it’s clear that selling cars for cash will remain essential to Tesla’s immediate prospects, even as Musk continues to push a grand vision for the company’s future.
Perhaps the days when purchasing a Tesla symbolized a commitment to environmentalism or a brighter future are behind us. Perhaps the stock price is immune to any financial gravity. Maybe car buyers won’t mind what some are already calling the “salute hoax.”
But if investors start to connect Musk more closely with white power than with clean energy, Tesla’s $1.4 trillion valuation could come crashing down—and fast.
Elon Musk, at a rally for Donald Trump’s inauguration on Monday, appeared to make two gestures resembling the infamous Siege Heil salute, which the internet widely interpreted as such. Musk himself referred to the event as “a fork in the road of human civilization.” His open support for far-right politicians in Europe and his transformation of Twitter into a platform for extreme views paint him as something of a propagandist for the meme age. But from a financial perspective, the key question is how this affects Tesla’s $1.4 trillion market capitalization—not humanity at large.
As an investment, Tesla has long been more than just a car company. The “Tesla-financial complex” has become a market force, driven by massive options trading that elevates the company beyond its core business. Investors aren’t just betting on electric vehicles; they’re betting on Musk’s future vision—whether that’s self-driving cars, robot axis, or the proliferation of optimists in every home. Or they’re simply betting that the tech boom will continue unabated.
However, unlike cryptocurrencies or other speculative assets, Tesla is a real company making actual products and convincing consumers to spend large amounts of money on them. Yet, when Tesla releases its full-year results next week, it’s expected that the company’s performance won’t be stellar.
Tesla’s annual sales are forecast to rise modestly to $99.6 billion in 2024, up from $96.8 billion in 2023, but the number of units sold is expected to fall. Intense competition—especially from China—and declining prices for electric vehicles are putting pressure on the company. With a valuation more than 12 times projected sales, many on Wall Street consider Tesla too expensive, with only a minority of analysts recommending it as a buy.
Although many short sellers have long since abandoned their positions, it’s clear that selling cars for cash will remain essential to Tesla’s immediate prospects, even as Musk continues to push a grand vision for the company’s future.
Perhaps the days when purchasing a Tesla symbolized a commitment to environmentalism or a brighter future are behind us. Perhaps the stock price is immune to any financial gravity. Maybe car buyers won’t mind what some are already calling the “salute hoax.”
But if investors start to connect Musk more closely with white power than with clean energy, Tesla’s $1.4 trillion valuation could come crashing down—and fast.
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