Steve Westly, a former Tesla board member, cautioned that the electric vehicle maker will face significant hurdles in maintaining its elevated stock valuation heading into 2026. He highlighted declining vehicle sales, profit pressures, and the need for progress in robotaxis and energy businesses. Investors, he said, will demand clear execution to justify current expectations.
Steve Westly, who served on Tesla's board, described 2026 as a pivotal and challenging year for the company during an interview on CNBC's Squawk on the Street. He predicted a second consecutive year of falling vehicle sales and shrinking profits, at a time when Tesla's market value remains near record highs. "They’re going to have to bend over backwards to keep that share price up," Westly stated.
At the time of the interview, Tesla's stock had dipped 1.3% to $479.26, though it has climbed 18% so far in 2025. Westly emphasized robotaxis as central to Tesla's valuation narrative, noting that Morgan Stanley attributes about 30% of the company's sum-of-the-parts value to this segment. Tesla recently updated its website to indicate that its robotaxi service is available in Austin, Texas, using the Model Y, with plans for expansion including the launch of the Cybercab—a vehicle without pedals or a steering wheel.
However, Westly pointed out that Tesla lags behind Waymo on key metrics. Tesla's robotaxis manage about 1,500 miles between critical interventions, compared to Waymo's roughly 17,000 miles. Waymo operates in around 20 markets and anticipates completing 14 million rides this year, increasing to 35 million next year. In contrast, Tesla's service is limited to two cities and requires safety drivers. Westly stressed the importance of securing regulatory approvals in more locations.
Beyond autonomy, Westly highlighted Tesla's energy division as a growth avenue. The business, encompassing Powerwall and Megapack products, is projected to expand from $10 billion last year to $14 billion this year, a 40% increase. This growth is driven by surging power demands from AI and data centers, positioning Tesla as more than just a carmaker but also a technology and energy player.
On Stocktwits, retail investors showed extremely bearish sentiment amid high message volume. One user forecasted 2026 as Tesla's worst year, while another anticipated a quick rebound to $482.
