The Math Isn't Mathing

Gary Black, managing director of The Future Fund LLC, is back with another reality check for Tesla Inc. (TSLA). On Tuesday, he took to X to question how the EV maker can possibly justify trading at a 200x+ forward price-to-earnings ratio when its electric vehicle sales keep sliding.

"I realize TSLA isn't just a car company," Black acknowledged, but here's the problem: EV sales still generate over 72% of Tesla's profits. When your cash cow is shrinking and your earnings estimates for both 2026 and 2030 are heading south, the valuation "doesn't make mathematical sense," he argued.

To be fair, Tesla has been signaling a major strategic shift. The company's Master Plan IV, unveiled last year, lays out a vision focused more on autonomous driving and robotics than traditional car sales. CEO Elon Musk has predicted that the Optimus humanoid robot alone could eventually represent 80% of Tesla's value. That's a bold bet on a future that hasn't arrived yet.

Sales Slip Despite Model Y Win

The timing of Black's comments is notable. Tesla's Model Y SUV claimed the crown as America's best-selling EV in 2025, moving more than 350,528 units. That sounds impressive until you zoom out: Tesla's total U.S. sales hit around 589,000 vehicles last year, down 7% from the prior year. Success in one model can't completely mask an overall sales decline.

Black isn't just worried about the numbers, though. He's been urging Tesla to step up its marketing efforts, particularly around Full Self-Driving technology, which currently has a take rate of just 15%. His concern? Without better marketing, Tesla risks getting overtaken by competitors in the robotaxi and autonomous driving space, the very markets Musk is counting on to justify that futuristic valuation.

It's a classic tension: Tesla is asking investors to pay for tomorrow's robot and autonomy business while still depending on today's car business, which happens to be struggling. Whether the math eventually works out depends on how quickly Tesla can make that transition real.

Price Action: TSLA slipped 0.39% at market close on Tuesday to $447.20, declining another 0.08% to $446.85 in after-hours trading, according to market data.