Ross Gerber, a well-known Tesla investor and CEO of Gerber Kawasaki Wealth Investment Management Company, recently commented that Tesla’s second quarter report was quite bad and there is no glimmer of hope in sight.
In Gerber's view, the electric car maker's problems are not going away anytime soon, and he still believes the biggest and most critical issue within the company remains CEO Musk's "public relations crisis."
He said in the latest interview that unless Musk addresses his reputation issues, which have been damaged among some consumers due to his foray into politics this year, Tesla may struggle to maintain growth.
Gerber added that he thinks Musk's absence from the public eye for at least a year could give Tesla a boost.
He said: "Unless someone is willing to face up to Musk's political stance, not just his views, but his actual behavior in public, it is extremely inappropriate, and basically everyone is disgusted with him now. Just imagine, when will someone face up to this obvious problem, which is Musk himself?"
"So, maybe in a year things will get better. But if he doesn't change his behavior, I don't see how it will get better," he added.
Tesla's global sales have plummeted, in part because of Musk's erratic behavior on social media and his involvement in politics this year. The company's automotive revenue fell to $16.6 billion last quarter, down 16% from a year earlier. Total revenue was $22.4 billion, down 12% year-on-year, the largest quarterly decline in at least 10 years.
"I mean, it's garbage," Gerber said of Tesla's latest results, adding that it's "sad and frustrating" that the company is declining in an industry that's constantly evolving.
Not only that, Gerber said he believes Tesla's financial situation will likely continue to deteriorate, with capital expenditures likely to rise in the short term while revenue remains stagnant. He believes Tesla needs to launch low-cost models if it wants to be competitive globally.
"There's no doubt in my mind that if you want sales to improve, you have to launch a new, lower-priced model." He added: "At the moment, Tesla seems to be in a crisis."
Regarding this point, Musk himself revealed in the earnings call that Tesla will soon launch a long-awaited affordable electric car, and this affordable car will be a new version of Model Y. Tesla revealed in its financial report that the company has started preliminary production of this model in June and is expected to begin mass production in the second half of this year.
Finally, Gerber lamented: "Sadly, I'm afraid it would take a terrible crisis to bring out the best in Elon, so maybe we can do that this time. You know, I don't know how many rabbits he can pull out of a hat, but I wouldn't bet against Elon."
This isn't the first time Gerber has warned about Tesla's future. Earlier this month, he warned that Tesla's stock price could fall by 50% if the market reassessed Tesla's value.