Tesla Analyst Flags Distraction Risk from Musk's OpenAI Gambit
Tesla CEO Elon Musk's $97.4 billion bid to acquire OpenAI has raised concerns among analysts that it could distract the company from its core challenges.
According to Oppenheimer analyst Colin Rusch, the offer comes at a significant 38% discount to OpenAI's previous valuation. Musk's move, which was reportedly rejected by OpenAI CEO Sam Altman, is seen as a "distraction" from Tesla's ongoing profitability issues.
Intensifying Competition Challenges
Rusch highlights the rising competition in the electric vehicle (EV) and autonomous vehicle (AV) industry as threats to Tesla's profitability. Google's Waymo and Chinese rival BYD's DeepSeek are noted as examples of this competition.
Additionally, BYD's price reduction of its entry-level model and XPeng's offer of free charging are adding pressure to Tesla's domestic market in China.
Musk's Political Stances Raise Concerns
Musk's political stances and his involvement in the Trump administration have also been flagged as potential risks for Tesla. Rusch states that these activities could negatively impact sales in California and the European Union, where Tesla has seen a decline since early 2023.
Sales Data Indicates Musk Effect
Data from Europe and the Netherlands shows a decline in Tesla sales following Musk's political actions. In the Netherlands, 33% of Tesla owners considered selling their vehicles due to Musk's views.
Analyst Outlook
Despite maintaining a "Perform" rating on Tesla, Rusch does not currently have a price target. He cautions that Musk's "public life risks alienating consumers and employees" as the Trump administration's actions test the limits of its power.