TSLA 0.00%↑ is entering a reset phase - fundamentally and technically.
Despite secular tailwinds and powerful long-term narratives (robotaxi, Dojo, energy), the numbers tell a different story in 2024: margins are compressing, earnings are falling, and valuation remains elevated.
The technicals agree: a completed (a)-(b) bounce is now rolling into a wave (c) down.
Let’s walk through the setup…
Fundamentals
Revenue Growth Stalling
Total revenue has hovered around $25B per quarter since Q2 2023, excluding a sharp dip in Q1 2024.
Growth has slowed to low single digits YoY - even negative QoQ in some quarters.
While deliveries are rebounding off a weak Q1 2024 base, full-year unit volumes are expected to decline ~1% YoY, highlighting stagnation despite price cuts and new markets.
European Weakness
Europe has become a serious pressure point.
Model Y registrations in key markets like Germany, Netherlands, and Norway are down over 30% YoY through Q2 2025.
Tesla’s market share in Europe is falling as domestic automakers scale their EV lineups.
Regulatory credit revenue is also declining as legacy OEMs close the emissions gap - cutting into a key high-margin revenue source.
Margin Compression
Tesla’s biggest structural risk right now is simple: margins are collapsing.
Gross margin has fallen from 25.6% in 2022 to 18.2% in 2023, and now sits at 17.9% in 2024. Street estimates expect it to drift toward 17% in 2025. That’s a nearly 900 bps drop in two years.
Operating margin has more than halved - from 17.0% in 2022 to 7.9% in 2024.
Net income margin dropped from 15.5% in 2023 to 7.3% in 2024, cutting profitability in half despite scale.
This isn’t just a short-term dip - it’s a secular reset. And yet, Tesla continues to trade at premium valuations typically reserved for asset-light, high-growth software.
EPS and Free Cash Flow
The income statement confirms the pressure.
EPS declined from $4.30 (2023) to an estimated $2.04 (2024) - a 53% YoY drop.
Street consensus expects $1.48 for 2025, still far from peak.Free cash flow margin is just 3.7% YTD, while Capex has increased sharply - 11.6% of revenue in 2024 vs 9.2% in 2023 - as Tesla scales Dojo, FSD, and energy infrastructure.
Valuation Disconnect
Despite the erosion in margins and earnings, Tesla is still valued like a high-growth AI disruptor:
P/E (TTM): 198x
P/FCF: 394x
EV/EBITDA: 97x
PEG Ratio: 12.1
These are multiples typically reserved for companies growing EPS 30–40% per year. Tesla is not.
Optionality: Robotaxi, FSD, Dojo
The bull thesis now hinges on potential, not performance.
FSD (Full Self-Driving): no regulatory approval or L4/L5 deployment. Still largely a beta program.
Robotaxi platform: Tesla began piloting a limited FSD ride service in Austin in June 2025, charging a flat $4.20 fee. Vehicles still operate with safety monitors, and the software remains Level 2. Multiple safety incidents have already drawn NHTSA scrutiny. There’s no dedicated autonomous vehicle, no insurance framework, and no scalable revenue model in place. A custom robotaxi is set to be unveiled in August 2025, but deployment and monetization remain uncertain.
Dojo + AI compute: long-term enabler of vertical autonomy stack, but not yet monetized.
Energy + storage: growing, but still low single-digit % of revenue and low margin.
Tesla’s real business today is still overwhelmingly auto manufacturing - and that business is under pressure.
Technicals
The chart agrees with the fundamental deterioration. The bounce from Q1 2024 lows now appears to be a completed corrective structure. Momentum has shifted.
Weekly
Rejected from 0.618 fib retrace at $383 and the 200-week EMA.
MACD crossed bearish. RSI rolled over under 55.
Wave (b) is complete. Wave (c) now underway.
1.0 extension of the (a)-(b)-(c) structure targets $240 - a key historical support from August–October 2023.
Daily
Clean rejection from the 200 EMA.
MACD bearish cross confirmed.
RSI showing bearish divergence.
Structure broke down from rising wedge/support channel.
A bounce to $295–$305 can’t be ruled out, but the broader structure favors continuation lower unless Tesla can reclaim and hold above the 200 EMA.
Trade Setup
Bias: Bearish
Structure: Wave (c) corrective leg unfolding
Key Levels:
Resistance: $305, $333
Support: $260, $240
Breakdown confirmation: < $276
Plan:
This is not a buy-the-dip setup. These levels represent zones to reassess the business- both fundamentally and technically. If Tesla trades down to $260 or $240, we’ll re-evaluate margin trends, optionality progress (robotaxi, Dojo), and whether the valuation finally reflects reality.
Until then, the path remains lower.
Final Take
Tesla’s long-term vision is undeniably bold. If the company delivers on its promises - robotaxis, full autonomy, energy scale, and AI infrastructure - then the current valuation could very well be justified, or even cheap in hindsight.
But as it stands, those pillars are aspirational, not operational. Robotaxi is in early-stage testing with safety concerns. FSD is still Level 2. Dojo has no revenue model. Energy is a rounding error.
Margins are falling. Growth is stalling. Valuation is stretched.
Until the narrative translates into real cash flow and operating leverage, there are too many uncertainties for this to be an investable story at current levels.
We’ll reassess if the chart hits $260 or $240. Until then, we stay on the sidelines.
