Tesla Has Big Plans to Reaccelerate Sales. But Is a Turnaround Already Priced In?

Core Viewpoint - Tesla is facing significant challenges in 2025, with a 30% year-to-date decline in shares and a 40% drop from its 52-week high, primarily due to economic uncertainty and high interest rates affecting vehicle affordability [2][8] Financial Performance - First-quarter automotive revenue fell 20% year-over-year, which is worse than the 8% decline in the fourth quarter of 2024 [2] - Earnings per share dropped 71% year-over-year in the first quarter [3] Management and Strategic Focus - CEO Elon Musk plans to devote more attention to Tesla's turnaround efforts, which has positively influenced investor sentiment [3][4] - The company is in the midst of several major projects aimed at revitalizing sales and stock performance [4] Growth Initiatives - Tesla expects to begin selling fully autonomous rides in June in Austin, which is a crucial step towards establishing a broader autonomous ride-sharing network [5] - Plans to launch new, more affordable vehicle models are on track for production in the first half of 2025, aimed at increasing sales amid high interest rates [6] - The new vehicles will utilize aspects of both next-generation and current platforms, allowing for efficient production increases of over 60% compared to 2024 volume without immediate new investments [7] Valuation Concerns - Tesla shares are currently trading at approximately 160 times earnings, raising concerns about the stock's valuation and the need for sustained double-digit profit growth over the next decade [8][9]