Written by Cláudio Afonso | LinkedIn | X
Oppenheimer’s analyst Colin Rusch released a new research note published this Tuesday that “Elon Musk’s bid for Open AI” is a “distraction from Tesla’s challenges”.
The note came less than 24 hours after the Wall Street Journal revealed that an Elon Musk-led group of investors offered $97.4 billion to control Open AI.
Sam Altman, Open AI’s CEO, has rejected the bid, posting “no thank you but we will buy twitter for $9.74 billion if you want” on X.
Regarding Elon Musk’s pursuit of Open AI, Rusch commented that “we don’t expect any meaningful discussions to develop”, but noted that there are “increasing risks to Street estimates for Tesla as EV and AV competition intensifies.”
Oppenheimer also referred to “Musk’s political activity” and “public life”, as Donald Trump appointed Tesla’s CEO as the lead of the newly created Department of Government Efficiency (DOGE).
The investment banking analyst said that Musk “risks alienating consumers and employees as the Trump administration tests the limits of its power.”
At the time of writing, Tesla is trading 4% lower at $337. After reaching its peak in mid-December at $488.54, the stock has tanked 31%.
Tesla Sales Performance in January
Colin Rusch highlighted “negative trends in CA and EU registrations in 2024 continuing in January 2025”, as well as China’s “soft start to the year at 11.5%”.
Oppenheimer has cut its Tesla’s 2025 delivery forecast by 20,000 vehicles and 2026 by 28,000, lowering its 2025 revenue estimate to $99.8 billion (from $101.1 billion).
According to Motor Intelligence, Tesla U.S. registrations stood at 48,000 vehicles in the U.S., declining 10.8% from a year ago. The California New Car Dealers Association (CNDA) also stated last week that Tesla’s numbers in the state fell 12% from January 2024.
In Europe, January records declined up to 63% when compared to the first month of 2024. While France saw the largest drop, Germany’s registrations fell 59.5%. The sales in China decreased from 71,447 units in January 2024 to 63,238.
Late last month, the company said that this year “will be a seminal year in Tesla’s history as FSD (supervised) continues to rapidly improve with the aim of ultimately exceeding human levels of safety.”
Tesla’s Model Y and Cybercab
The EV maker unveiled in January its revamped Model Y and will begin global deliveries in March. The refreshed SUV is also arriving in Europe, and production has already started across four of its plants.
Oppenheimer stated that Tesla’s continued offering of insurance subsidies and 0% financing indicate “price pressure”.
In January, Elon Musk confirmed, in an earnings call, that the U.S. company is expecting production of the Cybercab to take off in 2026, with the price marked under $30,000. Tesla’s robotaxi is waiting for regulatory approval in other states.
Testing for the full self-driving (FSD) system is set to start in June, in Texas, with the brand’s first model without any pedals or steering wheel.
Oppenheimer’s research note mentioned that even if Tesla meets “its June 2025 timeline for driverless cars” in Texas, the brand is still seen as “one of several autonomous technology providers, suggesting competition on price and performance”.
Elon Musk x Open AI
Elon Musk was an early investor and board member of Open AI. As the company prepared to transition from a non-profit to a for-profit corporation, Tesla’s CEO filed a lawsuit, pleading preliminary injunction in December 2024.
According to The Associated Press, Musk requested a court order to block ChatGPT’s company from going forward as a public benefit corporation (PBC), arguing that it would be against Open AI’s “founding aims as a non-profit research lab benefiting the public good”.
OpenAI’s CEO said Musk “likes to get into fights” in an open letter published by the company in December. According to Sam Altman, Elon Musk had proposed a “for-profit structure for OpenAI back in 2017 in his capacity as the co-founder of the non-profit”, having “walked away” after “he didn’t get majority equity and full control” in 2018.
