Future Fund’s Gary Black Sells All Of His Remaining Tesla Shares While Citing His Conviction That Tesla’s Valuation “Has Become Disconnected From Underlying Fundamentals”

Elon Musk has repeatedly taken pains to assert that Tesla is, in fact, an AI company, not grounded by the inherent limitations of a run-of-the-mill auto manufacturer. For seasoned analysts, however, this thesis presents a conundrum. After all, Tesla still derives the vast majority of its profits from selling vehicles, notwithstanding Elon Musk's masterful hype creation around robotaxis and the Optimus bipedal robot.

This growing chasm between an increasingly frothy valuation - which appears to be discounting Tesla's upcoming product launches - and the stock's meandering fundamentals has now led one seasoned Tesla bull to throw in the proverbial towel.

To wit, Future Fund's Gary Black has now exited the remainder of his long positions in Tesla. Critically, this is the first time since at least 2021 that Black does not retain any exposure to Tesla.

While explaining his rationale, Black notes that Tesla shares are currently trading at a 2025 P/E ratio of 188x. What's more, Tesla's auto business is actually shrinking, with Black expecting "2Q and FY’25 TSLA deliveries to decline by -12% YoY and -10% YoY respectively, vs WS ests of -7% YoY and -5% YoY."

Apart from concerns around valuation, Black feels that "the risk/reward associated with the Austin robotaxi test remain asymmetrical to the downside."

For the benefit of those who might not be aware, Tesla is gearing up to launch unsupervised FSD on the Model Y in Austin, Texas, this June, concurrent with the launch of between 10 and 20 robotaxis. By the end of 2025, the EV giant intends to roll out this service to a number of US cities.

However, despite this much-hyped launch now merely a few weeks away, Austin's transportation department, emergency responders, and even the federal regulators have yet to receive critical information, including the level of autonomy that Tesla's robotaxis will support at launch, as per a report by Fortune. What's more, the EV giant is yet to undertake robotaxi training sessions with Austin's emergency responders.

Coming back, Gary Black is also concerned about Tesla's upcoming affordable model that is not expected to feature a new form factor but would merely constitute a stripped-down version of the EV giant's existing product lineup, eroding Tesla's margins in the process without meaningfully expanding its TAM.

About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.

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