Tesla bear says Elon Musk's electric car maker 'will go bankrupt,' stock hits $14

Tesla Per Lekander, a hedge fund manager who has been shorting Elon Musk's electric car maker since 2020, told CNBC on Wednesday that the company could “collapse” while its stock price could fall to $14.

His comments come after Tesla announced deliveries of 386,810 vehicles in the first quarter of the year, far below even the lowest market estimates.

“This was really the beginning of the end for the Tesla bubble, which was probably the biggest stock market bubble in modern history,” Lekander, managing partner at investment management firm Clean Energy Transition, said on Squawk Box Europe.

“I actually think the company could go bankrupt.”

Tesla was not immediately available for comment when contacted by CNBC.

Lekander was a former portfolio manager at investment firm Lansdowne Partners, who successfully advocated for higher carbon prices in 2018. Since 2020, the clean energy transition has been short Tesla shares, meaning Lekander stands to profit if the automaker's shares fall .

In a March 2021 interview with CNBC, Lekander called for Tesla shares to decline. At the time of the interview, Tesla shares closed at $233.94. The stock closed Tuesday at $166.63. But Lekander also called for the return of traditional automakers, and singled out them Volkswagen. Volkswagen shares have fallen about 53% since that call, despite rising at the beginning of this year.

Lekander has taken his bearish forecast for Tesla even further, suggesting that the stock could fall to $14 per share. He said his call is based on an estimate that the company's earnings per share for the year will be $1.40. Lykander asserts that Tesla stock is a “non-growth” stock and should be valued at 10 times forward earnings, versus about 58 times forward earnings currently. Forward earnings are an important metric that traders use to measure a stock's value.

If Tesla stock hits $14, that would represent a roughly 91% decline from Tuesday's close. Tesla shares have already fallen more than 30% this year.

“I think Tesla's price can't be at $14. If its price drops below a certain level because of everything that's going on, it will collapse.”

Lekander gave a number of reasons for his negative outlook. He said Tesla's business model relies on strong revenue growth, vertical integration and direct-to-consumer sales. Vertical integration broadly refers to one company internally handling many parts of the process from vehicle manufacturing to software. This model is “great” when the company is growing, but it goes “in the opposite direction” when sales decline, Lekander said.

The hedge fund head said Tesla's problems in the first quarter were not related to some of the reasons the company cited, such as supply chain disruption. Instead, it's a “demand issue,” according to Lekander, who said two vehicles — the Model 3 and Model Y — make up the bulk of the U.S. automaker's sales. The company does not see launching another new car until 2025.

“I see absolutely no reason to see any recovery over the next two years given that these models are outdated and given that the economy is not booming,” Lekander said.

Tesla said in its statement on Tuesday that it faced many challenges during this quarter.

Lekander is among a group of negative voices on Tesla after disappointing delivery numbers.

“While the long-term electric vehicle proposal remains unchanged, the realities of implementing this proposal are already beginning to emerge, as Tesla (and others) have exhausted wealthy consumers willing to pay big money to be beta testers,” said Richard Windsor, founder of Radio Free. Mobile, in a research note on Wednesday.

Windsor has questioned Tesla's nearly $500 billion valuation as “ridiculous” at a time when the company faces increasing competition.

“There is still a lot of downside in Tesla shares,” Windsor said.

Dan Ives, a noted Tesla bull at Wedbush Securities, who has a $300 price target for the electric automaker, is growing concerned.

“Let's call this what it is: While we were expecting a bad first quarter, this was an unmitigated disaster of a first quarter that is hard to explain. We view this as a seminal moment in the Tesla story for Musk to either turn this around or reverse course,” Ives said in a note. Tuesday: “Black Eye Performance for the First Quarter of the Year.”

“Otherwise, it is clear that some dark days could be coming which could disrupt Tesla's story in the long term,” he added.

Analysts at HSBC and TD Cowen lowered their price targets for Tesla stock on Wednesday.

Tesla is arguably one of the most divisive stocks on Wall Street, and there are many stocks that remain bullish on the company.

Cathie Wood's Ark Invest bought Tesla shares for some of its funds this week ahead of first-quarter delivery numbers in a sign of support.

Meanwhile, some analysts are talking about Tesla's long-term potential.

Most of the reasons behind the drop in first-quarter deliveries were “one-time normal,” Tom Narayan, an analyst at RBC Capital Markets, told CNBC’s “Squawk Box Asia” on Wednesday.

But he said one near-term catalyst could be recent guidance from Tesla's CEO for employees to install and show customers how to use the latest version of the company's driver-assistance system, which is marketed as FSD, or Full Self-Driving. Tesla has also launched a free trial of the service for compatible cars that normally costs $199 per month.

“Maybe it will push people into showrooms, maybe it will push people to sign up for it, maybe it will push people to buy cars. So there is that catalyst in the near term,” Narayan said.

The RBC analyst, who has an outperform rating on Tesla stock with a $298 price target, said his rating is based on Tesla's energy storage business, which is a “huge opportunity” for the company. He added that “autonomy” is also a big part of his evaluation of Tesla.

“If FSD worked, now it does [Tesla] “It's a software company with software multiples,” Narayan said. Tesla's FSD system does not make the car autonomous. It still requires a driver to control the vehicle.