Tesla’s (Nasdaq: TSLA) unsold stock has Ross Gerber worried. The electric carmaker’s Q1 production and delivery report released on Sunday showed its inventory of unsold vehicles, particularly the luxury models S and X, is swelling to an uncomfortable figure.
“Delivery numbers for X/S are a bit troubling,” wrote Gerber, CEO of fund manager Gerber Kawasaki and a longtime Tesla supporter. “Even with price cuts they seem to have lost the high-end customers this quarter.”
On Sunday, Tesla touted breaking a new record in deliveries, even pushing Reuters to roll back on a headline that said they missed consensus targets. But considering the aggressive price cuts, the new record in deliveries is still only 4% higher than the previous quarter — the modest increase came at the cost of its margins, and the pain was still not enough to move its cars.
Gerber pointed out that the carmaker “at some point might actually have to try to sell cars,” a reality he thinks the company has to face.
The longtime Tesla bull is taking a more realistic perspective, taking his “friendly activist” role seriously. He acknowledged that the brand now has “legitimate competition” compared to his pronouncement back in 2021.
In December, Gerber got into a Twitter scuffle with Tesla CEO Elon Musk after he accused the latter of pushing the stock value down by being an absentee CEO.
And then in February, the investor announced his run for a seat on the carmaker’s board of directors, due to concerns over Tesla’s public relations, customer service, and succession planning.
He took back his bid a few weeks later after investor relations chief Martin Viecha told him that the company was already taking steps to address these concerns. He was pleased when he was told that Tesla was planning to create more marketing content, which could “move the brand away from its close identification with Musk,” according to Reuters.
“That’s what I’m talking about, them having their own voice separate from Elon,” he said.
Gerber clarified that he was not asked to withdraw from his run for the BOD. “They don’t want to fight with me and I don’t want to fight them,” he said. “It just makes sense to do this and not have an adversarial situation.”
Also, no updates yet on any new Tesla marketing campaigns as of this writing.
Information for this briefing was found via Reuters, Fortune, Twitter, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.