### The Future Fund Exits Tesla Holdings, Citing Concerns Over Valuation and Delivery Figures

In a surprising move, The Future Fund has decided to sell off its entire Tesla ($TSLA) position, marking the first time since 2021 that the firm has not held any Tesla shares. Gary Black, a prominent analyst at The Future Fund, outlined the rationale behind this decision, raising concerns about Tesla's current valuation and future projections.

The firm offloaded its Tesla shares at a price of $358 per share. According to Black, the ongoing assessment places Tesla's value at $310 per share, a forecast based on anticipated 2030 vehicle volumes of 5.4 million and an adjusted earnings-per-share (EPS) of $12 by 2030.

One of the primary reasons for The Future Fund's decision revolves around Tesla's price-to-earnings (P/E) ratio. Black pointed out that Tesla is currently trading at a P/E ratio of 188 times the expected 2025 earnings. This valuation appears high, especially given the recent downward trend in earnings estimates, which have fallen by 5% in the past week and 40% year-to-date. Black further noted concerns about Tesla's declining delivery figures, projecting a 12% decline in quarterly deliveries and a 10% drop for the full year, significantly higher than Wall Street's expectations of a 7% quarterly and a 5% annual decrease.

Another point of contention for Black is Tesla's robotaxi initiative, which despite being touted as a major future catalyst, has been met with skepticism. Black argues that the anticipated affordable model might turn out to be a simplified version of the Model Y, priced lower but not offering substantial new value. This approach could fail to expand the total addressable market as hoped, considering the Model Y has already been a top-seller globally for the past two years.

Black concludes by expressing concerns that Tesla's strategy of reducing electric vehicle prices, supported by lower costs, might not result in significant volume growth, echoing the trends observed in 2023 and 2024. This could lead to further declines in future earnings estimates, posing risks for Tesla’s long-term growth trajectory.