Gerber Kawasaki co-founder Ross Gerber has publicly criticized Tesla Inc.’s strategic pivot toward artificial intelligence and robotics, arguing that the electric vehicle maker could double its sales if it returned to focusing solely on vehicles and energy storage. Speaking to Benzinga, Gerber expressed frustration with CEO Elon Musk’s long-standing promises regarding autonomous driving, noting that despite years of testing, the technology remains unproven in real-world scenarios such as construction zones.

Strategic Pivot Criticism

Gerber argued that Musk’s decision to move away from selling cars to the general public stems from personal branding issues rather than market demand. He proposed a strategy involving increased marketing spend, the reintroduction of the Model S, and the launch of a $25,000 vehicle to broaden appeal.

"There’s no more Elon, you know," Gerber said. "Now we’re selling cars... Tesla would do well."

He highlighted a divergence between Musk’s production targets and actual output, noting that while Musk predicted 20 million cars annually five years ago, Tesla is currently "stuck at two [million]." Gerber also criticized the company’s product lineup for lacking variety, pointing to a third-party wrap market as evidence that consumers desire differentiation beyond the standard three colors offered.

SpaceX Merger Valuation Concerns

Addressing speculation about a potential merger between Tesla and Space Exploration Technologies Corp., Gerber warned of significant valuation conflicts. He cited Tesla’s current market capitalization at $1.3 trillion against SpaceX’s valuation of nearly $2 trillion.

Gerber stated that a merger would be dilutive to SpaceX shareholders because Tesla trades at a significantly higher forward price-to-earnings multiple (150) compared to SpaceX (80). He described the combined entity’s potential $4 trillion valuation as a "joke" and warned of legal challenges due to conflicts of interest involving Musk’s control over both boards.

What the Numbers Show

The disparity in forward P/E multiples highlights a fundamental valuation mismatch between the two entities. Tesla’s multiple of 150 implies the market prices in significant future growth from its AI and robotics ambitions, whereas SpaceX’s lower multiple of 80 reflects a different risk-return profile despite its higher absolute valuation. This gap suggests that any consolidation would require substantial equity issuance from SpaceX, potentially diluting existing holders if the market does not revalue the combined unit at Tesla’s premium multiple.

Autonomous Driving Challenges

Gerber shared personal experiences with Tesla’s Full Self-Driving (FSD) software, describing its performance in construction zones as "mayhem." He noted that the system struggles to interpret human gestures, such as people waving directions, unlike competitors like Alphabet Inc.’s Waymo, which opts to take longer detours to avoid complex intersections. He characterized Musk’s claims about imminent robotaxi deployment as "delusional," given the lack of functional autonomous cabs in major cities.

Outlook

Gerber concluded that Musk faces an "extremely challenging" period with simultaneous pressures on Starship development, FSD reliability, and car sales. He suggested that investors might benefit more from companies supplying infrastructure and equipment to Musk’s ventures rather than holding equity in Tesla or SpaceX directly.

Electric vehicle sales in North America contracted sharply in July, falling 27% to 140,000 units. This monthly decline contributed to a broader slowdown across the region, with total EV sales for the first seven months of the year reaching 900,000 units, an 18% decrease compared to the same period last year.

Compensation Disparity

Reports highlighted significant disparities in executive compensation at Tesla Inc. (NASDAQ: TSLA). Elon Musk’s 2025 pay package was valued at $158 billion, a figure exceeding the combined total compensation of all other S&P 500 company CEOs. The package represented 2.5 million times the compensation of a median Tesla worker in 2025.

Strategic Outlook and Branding

Gary Black, managing partner of The Future Fund LLC, suggested that Tesla needs to invest in long-term marketing and branding strategies as it expands beyond electric vehicles. Despite a market capitalization of $1.3 trillion, Black opined that the company has not invested sufficiently in marketing leadership.

Potential Merger Implications

Musk could potentially receive approximately $824 billion if a merger between Tesla and Space Exploration Technologies Corp (NASDAQ: SPCX) occurs. The pay package is tied to performance-related milestones, which would be treated as satisfied in the event of a takeover or merger, according to the outlined conditions.

Product Developments

Regarding product innovation, Musk recently promised the arrival of flying cars, potentially integrated with the Tesla Roadster. He had previously hinted that the next-generation Roadster might have the capability to briefly leave the ground.

What the Numbers Show

The divergence between global EV sales growth and the 27% decline in North American sales highlights regional headwinds. While global figures saw an uptick, North America’s 18% year-on-year drop for the first seven months suggests weakening demand or reduced discounting incentives in the region, contrasting with broader international trends.