Key Takeaways
- Gary Black says Tesla’s share of US electric-car sales fell from 80% in 2020 to 52% today, as models from Hyundai, Toyota and GM gained.
- Tesla’s revenue was $94.8 billion in 2025, below 2023’s $96.8 billion, and its operating margin fell to 4.6% from 16.8% in 2022.
- At 187x forward earnings, well above its five-year average of 108x, Tesla’s price depends on FSD and autonomy far more than on car sales.
- Bulls point to paid FSD on more than 75% of new North American deliveries, but the bigger test is Robotaxi, which Elon Musk expects to move Tesla’s finances around the second quarter of 2027.
Tesla (TSLA) stock had a strong week. On October 31, The Future Fund’s Gary Black spent part of his Saturday arguing that the car business underneath it keeps losing ground.
An X account called @TheTeslaBull had challenged him to “Name a competitive EV in USA.” Black replied that this was the wrong question:
“The relevant question is how does TSLA stop its EV US share decline (from 80% in 2020 to 52% today) to justify its 200x+ P/E multiple”
He listed the biggest gainers as Hyundai’s IONIQ 5, Toyota’s bZ, Chevrolet’s Equinox EV, Rivian’s R1S, Ford’s Mustang Mach-E, Honda’s Prologue and Kia’s EV9.
That’s the whole Tesla debate in one sentence.
Tesla’s Car Business Has Gone Sideways
Tesla’s own numbers show the slide. Its US revenue fell 14% from a year earlier to $12.5 billion in the third quarter of 2026, while revenue from markets outside the US and China rose 32%.
Total revenue has been flat for three years, at $96.8 billion in 2023 and $94.8 billion in 2025.
Analysts expect growth to come back, with revenue reaching $146 billion by 2028. Even so, their earnings estimate for that year, $3.30 a share, is still below the $4.07 Tesla earned in 2022.
187x for Flat Sales
Tesla trades at 187x forward earnings, far above its five-year average of 108x.
No carmaker with flat sales gets that multiple. People buying at 187x are paying for FSD, Robotaxi and Optimus.
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Tesla’s Rivals Are Shrinking Too
The bulls make a fair point about the share figures. As @TheTeslaBull put it, “Of course share falls from an ~80% near-monopoly as more EVs appear.”
The account cited Kelley Blue Book and Cox Automotive figures for 2026 through the third quarter. On those numbers, the Model Y alone sold 262,000 units, about 36% of all US EV sales, while most of Black’s gainers sold fewer cars than a year earlier:
- Hyundai IONIQ 5: 31,000 (down 24%)
- Chevrolet Equinox EV: 18,000 (down 66%)
- Ford Mustang Mach-E: 17,000 (down 59%)
- Honda Prologue: 13,000 (down 64%)
Only Toyota’s bZ grew fast, up 103% to 25,000, though the account noted that came “from a tiny base.”
That actually helps Black. The account says Tesla’s share has held at 52% to 54% while its rivals sell fewer cars. If both are true, the whole US EV market is shrinking, and Tesla is shrinking with it. That fits the 14% drop in its US revenue.
Black’s follow-up was that Tesla is losing share “even with a huge first movers’ advantage and a huge cost/scale advantage.” Being bigger hasn’t protected its profits either. Tesla’s operating margin fell every year from 16.8% in 2022 to 4.6% in 2025.
In the third quarter of 2026 it was 2.6%, down from 5.8% a year earlier, though up from 1.4% in the second quarter. Part of that drop is spending on autonomy itself: research and development costs rose 69% from a year earlier.
Software Is the Tesla Bull Case
The bulls’ strongest argument is FSD. More than 75% of Tesla’s new North American deliveries in the third quarter came with a paid FSD sign-up, up from about 55% in the second quarter, and Tesla’s CFO told the call that FSD “continues to be the key driver for demand.”
Active FSD subscriptions rose 67% from a year earlier to 1.74 million. On the call, management agreed with an analyst’s estimate that FSD is nearing about $1 billion in annual recurring revenue.
That’s real progress. But $1 billion a year is only about 1% of Tesla’s 2025 revenue.
So a 187x multiple depends on what comes after subscriptions, which is Robotaxi. Musk said he expects it to make a noticeable difference to Tesla’s finances around the second quarter of 2027. For now, it operates in six cities.
Conclusion
Black has the math right over six years. Whether Tesla’s share holds at 52% or slips again, the car business can’t justify this multiple on its own. Buying at 187x means buying Musk’s Robotaxi timeline, and that’s the part with the least evidence behind it so far. Fourth-quarter results in late January should bring Tesla’s 2027 spending plans, and the second quarter of 2027 is the date Musk has put on the line. If Robotaxi revenue shows up by then, the bulls will have a much better reply to Black.
So what is Tesla stock actually worth?
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Disclaimer:
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