Tesla has always been treated more like a tech disruptor than your average car company. But slumping sales, a fluctuating stock price, and Elon Musk’s right-wing antics have brought this once vaunted company back down to earth. A closer look at its fundamentals reveal troubling signs for Tesla’s future.
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00:00Last week, Tesla CEO Elon Musk held a surprise all-hands meeting in which he promised his
00:06employees that Tesla's future is incredibly bright and exciting.
00:11The reason Musk felt the need to reassure the troops was, well, pretty much everything.
00:17Tesla's stock was cratering, its sales were slumping, its showrooms were attracting protests
00:22that were growing in size each week.
00:25Tesla used to be synonymous with the future.
00:27Now it's turned toxic.
00:29Many Tesla owners are selling their vehicles at a big loss, saying they're disgusted
00:33with Musk's slash-and-burn tactics for the Trump administration.
00:37Teslas are being torched across the country.
00:39Parallel to that, people have been vandalizing Tesla vehicles, setting them on fire and destroying
00:43charging stations.
00:45Things have gotten so bad that Donald Trump basically did a live commercial for Tesla
00:50on the front lawn of the White House.
00:51Everything's computer!
00:52And now his Department of Justice is threatening people who vandalize Teslas with charges of
00:57domestic terrorism.
00:58This is domestic terrorism.
01:00So is Tesla cooked?
01:03The company's future looks increasingly uncertain.
01:06But if we're asking whether Tesla is truly cooked, I think it's worth taking a look at
01:10four distinct challenges facing the company.
01:13The sales slump, Tesla's vehicle lineup, the robo-taxi question, and then the Elon of it all.
01:20Then we might better understand how dire the company's future really is.
01:25The first sign something was off was January of 2024, when Elon Musk warned investors of
01:30quote, notably lower sales growth this year as it focuses on designing a new vehicle.
01:36People thought that this was supposed to be the long-rumored Model 2, which was going
01:40to be the most affordable Tesla yet.
01:42So what else happened in 2024?
01:43Well, Trump was almost assassinated, and Musk endorsed him and committed over $200 million
01:48to get him elected, yada yada yada, Trump wins.
01:51And Tesla's stock soars, hitting a new record in December of nearly $480 a share.
01:57One for the ages.
01:59Musk's big bet pays off.
02:03A month later, lo and behold, Musk's prediction of a slump comes true, and the company reports
02:09its first annual sales decrease in over a decade.
02:12Meanwhile, Musk does his Nazi salute at the inauguration, Trump makes Musk head of Doge,
02:18and that's when the real fun begins.
02:20As Musk starts his slash-and-burn campaign, we can start to see in real time the effect
02:25it's having on Tesla's sales.
02:27In California, Tesla's biggest market in the US, its sales dropped 12% for the year.
02:33Meanwhile, other EV sales are growing.
02:36In Europe, it's much worse.
02:38In February, Tesla's sales were down 45% in France, 53% in Portugal, 55% in Italy,
02:45and a whopping 76% in Germany, where Musk had meddled in the country's election by
02:50endorsing the far-right Alternative for Germany party.
02:53In China, the world's largest car market, Tesla has been on a sustained losing streak.
02:59The company has been backsliding for the past five consecutive months on a year-on-year
03:03basis as companies like BYD and others report surging sales.
03:08Tesla's once-enviable status as number one seller of electric vehicles in the world was
03:15slipping.
03:17So one of the main reasons the company's sales have been slipping was that its vehicles were
03:21getting old.
03:22The Model X turns 10 this year, while the Model S is pushing 15.
03:26Both vehicles have only received minor updates since their initial launch.
03:30The Model 3 and Model Y, which represent the bulk of the company's automotive revenues,
03:34were both updated recently, but the lag in regular updates has opened a window of opportunity
03:38for Tesla's competitors.
03:41People suddenly have a wealth of choices as newer, more interesting EVs from Hyundai,
03:46Kia, Honda, and GM hit the market.
03:49Meanwhile, Tesla's only new model to be introduced in the last five years is the Cybertruck,
03:54which has been recalled seven times since its launch.
03:57Wait, no, I'm sorry.
03:58I'm receiving word that there's been an eighth recall.
04:01Apparently the stainless steel trim has been flying off.
04:04I guess it needs more glue.
04:05While Tesla sales dropped, sales of non-Tesla EVs continued to climb.
04:10Americans bought a record 1.3 million electric cars in 2024, an increase of 7.3% year over
04:16year.
04:17EVs now claim 8.1% of the vehicle market in the U.S.
04:23Americans aren't souring on electric vehicles, they're just over Tesla.
04:29Elon thinks this storm is worth weathering because Tesla's future is in self-driving
04:34cars, AI, and robotics.
04:37He believes that Tesla is on the cusp of solving autonomy, a claim that he's pretty
04:41much made every year for almost a decade.
04:43Well, I tend to be a little optimistic with time frames.
04:46Tesla is planning to launch robo-taxis in Texas and California later this year, but
04:50the company lacks many of the permits required to do that legally.
04:54And there are serious questions about whether Tesla's technology is good enough to operate
04:59fully driverless vehicles.
05:01Even if the company eventually fulfills its promise by launching a limited robo-taxi pilot
05:06this year, that would still be miles away from Musk's earlier promise that all Tesla
05:11vehicles sold since 2016 have the necessary tech for full self-driving.
05:16That promise turned out to be completely false, with Musk admitting recently that Tesla would
05:21need to replace the onboard computer for some vehicle owners who bought the FSD package.
05:26We're already starting to see class action lawsuits claiming that Tesla has perpetuated
05:30a massive fraud on its customers.
05:34And then there's Elon.
05:37And Doge.
05:39And the Nazi salute.
05:41And the chainsaw.
05:42And Darkmaga.
05:43Musk's antics have turned the Tesla brand toxic, and the Tesla takedown protesters want
05:48to accelerate that.
05:50To them, protesting Tesla is about opposing Musk and the power accrued by an unelected
05:54billionaire who's eliminating humanitarian aid programs and firing thousands of federal
05:59workers.
06:00They want to hit him where it hurts.
06:02The protests have largely been peaceful, but not everyone is interested in nonviolent
06:07resistance.
06:08A targeted attack.
06:09We were struck by gunfire.
06:11This was intentional.
06:12Tesla charging stations have been set on fire.
06:14A showroom in Oregon was shot up.
06:16At least seven shots were fired.
06:18A woman was arrested in Colorado for throwing a Molotov cocktail at a Tesla location.
06:23Tesla vehicles have been defaced with swastikas and expletives.
06:26Several Tesla Cybertrucks were vandalized over the weekend.
06:30Four Cybertrucks were destroyed in a fire in Seattle.
06:33The rage is real.
06:35The question is whether things will get so bad that Tesla shareholders demand new leadership.
06:41It seems unlikely, especially after shareholders voted to approve a massive $56 billion pay
06:46package for the CEO.
06:48Twice.
06:49But that was before Doge, before the salute, and before the stock wipeout.
06:53Tesla's board is clearly feeling the pinch.
06:56Federal board directors, including the chair, have sold over $100 million in Tesla stock
07:01since the beginning of the year.
07:02But it's not clear that hurting Tesla will actually matter much to Musk.
07:06He remains in Trump's good graces, and predictions of an imminent falling out between the two
07:10appear to be mostly wish-casting.
07:13Even if these protests can seriously affect Tesla, Musk has consolidated so much political
07:18power that, after a certain point, it's not clear whether market forces still apply
07:23as strongly.
07:24As far as the company's future, a lot rests with Musk's promise for a cheaper Tesla,
07:29a next-generation vehicle platform, and an actual working robo-taxi service.
07:35Donald Trump can buy or sell as many Teslas as he wants, but if Tesla's future is built
07:40on a bunch of falsehoods and fantasies, it's unlikely the company can emerge from this
07:45fire unscathed.
07:48Lots of news going on with Tesla lately.
07:50We're trying to cover it as fast as we can, so please stay on theverge.com for all the
07:54latest going on with this company.