Tesla's OpenAI Bid Raises Concerns over Musk's Focus Amid Intensifying Competition
One Wall Street analyst warns that Elon Musk's pursuit of OpenAI may distract Tesla from critical challenges at a crucial juncture.
Analysts highlight that Musk's bid for OpenAI, valued at $97.4 billion, falls 38% below its October 2024 capital raise. SoftBank reportedly plans to invest $40 billion in OpenAI at a valuation of $260 billion.
Heightened Competition and Musk's Lack of Attention
Tesla's profitability in the autonomous space faces risks from rivals such as Google's Waymo and Chinese competitors like BYD. Intense competition in China, with BYD lowering entry-level model prices below $10,000, poses further challenges.
Musk's Political Stances and Tesla Sales
Analysts note that Musk's vocal political stances and growing role in the Trump administration could negatively impact Tesla's sales, particularly in California, the EU, and the Netherlands, where a significant number of Tesla owners expressed concerns about selling their vehicles due to Musk's views.
Declining Favorability and Sales
Research indicates that Tesla's favorability ratings have declined due to Musk's polarizing behavior, affecting sales. Tesla reported a 1% year-over-year decline in deliveries in 2024 and missed analyst estimates in the fourth quarter.
Analyst Outlook
Oppenheimer analyst Colin Rusch maintains a "Perform" rating on Tesla but has no current price target. Rusch emphasizes that Musk's public actions risk alienating customers and employees amidst the Trump administration's actions.