Analyst Glenn Thum has downgraded Tesla's stock rating to "sell."

Tesla's fourth-quarter 2024 earnings report was underwhelming, but CEO Elon Musk remained optimistic during the earnings call, emphasizing the company's future growth prospects, including ongoing cost reductions, the launch of the new Model Y, the advancement of automation and full self-driving (FSD) technology, and plans to produce low-cost electric vehicles. However, Glenn Thum, an analyst at Phillips Securities, downgraded Tesla's stock to "sell" and noted that the company's fourth-quarter performance was "overall negative," with a decline in auto revenue, gross margin, and average selling price. Despite setting a new record for sales in China in 2024, Tesla's market share continued to be eroded by BYD, falling from 8% in the 2023 fiscal year to 6% in the 2024 fiscal year. Thum also highlighted the political risk brought by the Trump administration, noting that Tesla's profitability on ambitious projects such as FSD, Robotaxi, and Optimus could take 3 to 5 years. Considering Tesla's expected price-to-earnings ratio of 160 times in 2025, Thum believes the market may have already priced in these expectations.