The EV party may still be raging on Wall Street, but JPMorgan just showed up to shut it down.
In a bold call that's sure to spark debate, JPMorgan analyst Ryan Brinkman just named both Tesla Inc (NASDAQ:TSLA) and Rivian Automotive Inc (NASDAQ:RIVN) as top short ideas for the second half of 2025.
His rationale? Sky-high valuations, shrinking subsidies, and a growing disconnect between expectations and reality.
Tesla's Valuation Is In Overdrive
Let's start with Tesla — the undisputed king of electric dreams. Trading at 142x forward earnings, Tesla's valuation towers over the rest of the so-called Magnificent 7, which average just 25.2x. That multiple might be easier to swallow if earnings were growing.
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But JPMorgan is forecasting a third straight year of EPS declines, thanks in part to thinner margins, reduced government subsidies, and a robotaxi moonshot that Brinkman says is unlikely to deliver — literally or figuratively — due to a "lack of sensor redundancy."
In other words: Tesla's autopilot isn't ready, and neither is its valuation.
Rivian's Burn Rate Hits A Wall
Then there's Rivian, trading just above $13, with cash burn still off the charts. Brinkman doesn't mince words here either: slashed EV subsidies and rising tariffs could cripple Rivian's ability to trim its massive EBITDA losses and free cash outflows. For a company still trying to scale, that's like hiking uphill with your battery pack unplugged.
JPMorgan's call reflects a growing concern: the EV boom has hit an economic speed bump, with government support fading and competition intensifying. That doesn't mean the long-term EV story is dead – but it does suggest investors may be paying 2030 prices for 2025 problems.
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