Ross Gerber, a veteran investor who has maintained a long-standing position in Tesla, expressed a sense of resignation rather than enthusiasm toward the company’s recently introduced, more budget-friendly models. In his view, these additions did not represent a remarkable innovation or a surprising strategic pivot. Speaking to Business Insider, Gerber remarked that what Tesla presented was, in essence, simply a new iteration of the Model Y — a car that the company had already perfected to its most advanced version. This observation suggested that the latest release failed to offer a substantially new proposition to either consumers or investors.
Elaborating on the commercial implications, Gerber explained that the primary challenge facing Tesla lay in the heightened price sensitivity of modern consumers. Most car buyers, he noted, approach their decision-making process with clear financial constraints in mind. When confronted with multiple variations of essentially the same product — in this case, two, three, or even four versions of the same vehicle — the rational economic choice for the vast majority is to select the least expensive model available. This natural consumer inclination, he emphasized, poses a significant dilemma for Tesla’s pricing strategy, as sales of higher-end versions may decline in favor of models that undercut them on cost.
Gerber further argued that this strategic shift in product positioning could transform how the public perceives Tesla’s brand identity. By offering cars that cater increasingly to value-oriented segments of the market, Tesla risks diluting the aura of exclusivity and luxury that once distinguished it from competitors. He described this evolution as a repositioning of Tesla from a marque once aligned with high-end sophistication—comparable to Mercedes-Benz—toward one more reminiscent of a mass-market manufacturer such as Toyota. The brand, in his estimation, may now be viewed less as an emblem of aspirational luxury and more as a practical, accessible automotive option for cost-conscious buyers.
In an earlier comment shared on X, Gerber pointed out that he had predicted precisely this outcome. He underscored that the price reduction of roughly $7,500 would inevitably cannibalize demand for Tesla’s more expensive models, ultimately undermining the company’s profitability rather than expanding its overall market reach. His post also contained a sharp critique of Tesla’s leadership, accusing the chief executive officer of diverting advantages from the electric vehicle tax credit for personal benefit. This, Gerber implied, had contributed to a misalignment of incentives that weakened Tesla’s pricing power.
As the chief executive officer and president of Gerber-Kawasaki Wealth Management, Gerber has not been shy about voicing his skepticism toward both Tesla and Elon Musk’s management decisions. Earlier in the year, his firm notably sold off its holdings in Tesla, signaling a decisive lack of confidence in the company’s near-term trajectory. In July, Gerber had warned that the expiration of federal electric vehicle tax incentives could adversely affect Tesla’s performance and projected that the company’s stock price would likely continue its downward trend. Although subsequent market developments contradicted that expectation — with Tesla’s share price rebounding in the months that followed — Gerber has maintained a cautious stance.
At present, despite his criticisms and previous divestment, Gerber continues to oversee approximately $80 million worth of Tesla shares. This position demonstrates both his enduring interest in the company’s long-term prospects and his pragmatic acknowledgment of Tesla’s continued significance in the electric vehicle sector, even as he remains vocal about what he perceives as strategic missteps in its evolving brand and pricing direction.
Sourse: https://www.businessinsider.com/new-more-affordable-tesla-models-analysts-business-leaders-react-2025-10
