Tesla's Lost Cause

Forbes

07-05-2025

HAWTHORNE, CALIFORNIA - MAY 2: Tesla cars are seen parked and charging at a Tesla Supercharger on ... More May 2, 2025 in Hawthorne, California. (Photo by Jay) Getty Images
What happened to Tesla's (NASDAQ:TSLA) mission to drive the most incredible energy transformation? Wean the world off gasoline and hook it up to electric vehicles. It mattered. It still does. Why?
One number captures it all.
66%
Yes, 66% is the fraction of oil that's used in transportation. See U.S. Oil Consumption By Sector. Think of that. If all cars ran on electricity, petroleum product consumption would drop dramatically, by almost half. The remainder, jet fuel, and harder-to-solve use cases would come soon after.
This is why Tesla still matters. Electrifying transport isn't just a cool technology trend - it's a direct assault on the world's biggest source of oil demand. Clearly, Tesla stock is volatile, and if you are looking for potential upside with less volatility than a single stock, consider the High-Quality portfolio , which has outperformed the S&P 500 and delivered returns exceeding 91% since its inception. So what?
Look at the two pictures below. Air pollution in the U.S. during Covid-19. That's the first picture. And the second one is business as usual.
Air pollution in the U.S. during Covid-19 NASA Scientific Visualization Studio
Air pollution in the U.S. before Covid-19 NASA Scientific Visualization Studio
Night and day. It's as if we're living in a world shrouded by carbon emissions, and oblivious.
But there is something even simpler. Achieving nearly 100% EV in America is still within Tesla's reach.
Think: Tesla's EVs can scale in autos. In the same way, Apple's iPhones scaled in mobile phones.
Before iPhones, more than 90% of mobile phones were feature phones - yes, they existed. They were everywhere, Motorola Razors, Nokias. They didn't even have internet browsing.
EVs as a segment can grow to become all autos. So what happened?
It's happening in China! Roughly 40% of all vehicles sold in China in Q1 2025 were EVs or plug-in hybrids. Tesla, however, is losing ground. Its deliveries in China fell 8% in April, even as the broader EV market grew. Local champions like BYD are producing more vehicles, with more tech, at lower prices. But not in America, where it all started. Where did we lose our edge? Our advantage? Our purpose?
Tesla's U.S. market share is also slipping. Despite a record Q1 for EVs overall in the U.S., Tesla's share of the U.S. auto market fell to just 3%, down from highs of about 5%. That's not just market dynamics - it's a brand under pressure. Part of the reason is Elon Musk himself. His political endorsements and polarizing behavior have turned off parts of Tesla's core audience. In Europe, Tesla's April sales plunged - down 62% in the UK, 67% in Denmark, 74% in the Netherlands, and 59% in France - even as EV adoption rose in these countries.
Cheap gas isn't helping either. U.S. crude prices have dropped below $60 a barrel, meaning that gas vehicles are getting cheaper to run. That undercuts one of the stronger economic cases for going electric. Combine that with a mixed economy, and many customers could start delaying upgrades.
Now Musk is back from DOGE business, maybe he'll remember Tesla's bigger energy cause. Growing Tesla from 2 million cars to 20 million cars sold annually is good - good for the environment, good for Tesla, and good for Elon Musk's wealth! There are some tailwinds Tesla could ride on. Trump's tariffs on vehicles could give Tesla an edge due to its sizable domestic manufacturing. A friendly regulatory setup could help Tesla push its autonomous driving features faster to market, giving it a lead over rivals. See: Should Tesla Still Be Valued Like a Growth Stock? Preserve & Grow Wealth With Risk-Focused Quality Portfolios
For investors aiming to reduce the inherent volatility associated with individual stocks like Tesla, there are alternative investment strategies available. The Trefis RV strategy , which has a history of outperforming its all-cap stock benchmark, provides a diversified approach to potentially achieve solid returns. Likewise, the High-Quality portfolio has shown superior performance compared to the S&P 500 with returns that exceed 91% since its initiation, offering potential upside with reduced stock-specific risk.