Tesla urgently wants to fulfill two key targets to justify its valuation or buyers ought to promote the inventory, the corporate’s former board member Steve Westly instructed CNBC on Thursday. Westly, founding father of enterprise fund The Westly Group, mentioned Tesla’s fourth-quarter outcomes revealed Wednesday had been a “lackluster finish to a difficult 12 months.” Tesla reported a 2% improve in year-on-year income to $25.71 billion over the interval, beneath the $27.26 billion anticipated in an LSEG ballot of analysts. Automotive income dropped 8% to $19.8 billion within the fourth quarter, of which $692 million got here from regulatory credit, whereas total working earnings slid 23% year-on-year to $1.6 billion. The agency mentioned that diminished common promoting costs throughout its Mannequin 3, Mannequin Y, Mannequin S and Mannequin X traces had been a significant component within the declines. “This can be a firm that grew 71% 12 months over 12 months in 2021, 51% in 2022, now could be barely rising in any respect,” Westly mentioned, including that the autumn in automotive income was a “shocker.” One saving grace throughout the outcomes was Tesla’s “scorching” vitality division which shored up total progress, he continued. The enterprise’s vitality technology and storage income soared 113% within the last three months of the 12 months to $3.06 billion, in line with the corporate outcomes. Nevertheless, “most individuals are investing as a result of it is a automobile firm,” Westly mentioned. “This can be a make-or-break 12 months.” TSLA 1Y line Tesla share value. Tesla has lengthy held a bonus as one of many first movers within the electrical car market, with a number one charging community. Lengthy a beneficiary of the favorability of U.S. progress shares, Tesla’s worth has additionally rallied following the re-election of U.S. President Donald Trump , who was strongly backed by Tesla CEO Elon Musk . Nevertheless, EV competitors grows hotter every year — significantly from main Chinese language participant BYD , but in addition as conventional automakers from Japan to Germany pivot to give attention to new electrical fashions and gross sales. 1. Cheaper mannequin To carry onto its $1.2 trillion market capitalization, Westly instructed CNBC, Tesla should urgently get extra merchandise onto the market, together with a mannequin for beneath $30,000 and a completely self-driving car. “The excellent news is, battery costs are dropping, and so they’re dropping shortly. They’re anticipated to drop one other 50% by 2030, the world’s going all electrical … and Tesla’s form of the title you already know in that EV area, so there’s numerous tailwinds there,” he mentioned. “The flip facet is that they have not launched new merchandise for some time. The Cybertruck ‘s largely been a flop. They desperately want the brand new sub-$30,000 Mannequin Q out there ASAP,” Westly added. He pointed to lower-cost EV choices from China coming in with a $10,000-$20,000 price ticket, with BYD constructing vegetation throughout Thailand, South America and Hungary. It means Europe is about to expertise a “tidal wave” of Chinese language choices,” he added. “So that is all going to place stress on Tesla. They have to get a low-cost car out,” Westly mentioned. 2. ‘Repair full self-driving’ Tesla has additionally “acquired to repair full self-driving,” Westly added. “Elon’s promised this for the final three years in a row. They’re lagging behind [ Google ‘s self-driving car project ] Waymo, so [there is] numerous catching as much as do.” A key achievement will probably be gaining regulatory approval for Tesla’s unsupervised self-driving system in Austin and different cities, in line with Westly. Musk mentioned through the firm’s earnings name that Tesla could be “launching unsupervised Full Self-Driving as a paid service” in Austin in June. In September, the automaker mentioned it might launch its current Full Self Driving (FSD) product in Europe in China in early 2025. FSD is a paid add-on that enhances the present Autopilot driver assistant and nonetheless requires a driver to oversee the car behind the wheel. Within the U.S., the know-how is dealing with a Nationwide Freeway Site visitors Security Administration security probe . Tesla’s present ahead valuation will probably be “awfully exhausting to justify” until it may possibly convey these new merchandise to market, Westly mentioned. “For me, [the stock] may be a promote for now, until they’ll present some fairly putting ends in Q1 or Q2, we’ll see,” he flagged, referring to the primary and second quarter. — CNBC’s Lora Kolodny contributed to this text.