Elon Musk admits ‘rough' times ahead for Tesla as company focuses less on selling cars, more on robo-taxis
*
SIGN UP
I would like to be emailed about offers, events and updates from The Independent. Read our Privacy notice
Tesla shares fell on Thursday after CEO Elon Musk said the company could face a 'few rough quarters' as it transitions to a future focused less on selling cars and more on offering self-driving taxis.
Many prospective buyers have been turned off by Musk's foray into right-wing politics, and the competition has ramped up in key markets such as Europe and China.
Revenue dropped by 12 per cent and profit fell by 16 per cent as the electric vehicle maker reported another quarter of lackluster financial results.
Revenues and profits have both fallen at Tesla
( AP )
Tesla faces the loss of the $7,500 EV tax credit and stands to make much less money from selling regulatory credits to other automakers after recent changes to federal tax law.
President Donald Trump's tariffs on countries including China and Mexico will also cost Tesla hundreds of millions of dollars, the company said on its earnings call.
Musk spent the call talking less about car sales and more about robo-taxis, automated driving software and robotics, which he says is the future of the company.
But he acknowledged those businesses are a ways off from contributing to Tesla's bottom line.
Tesla began a rollout in June of its paid robo-taxi service in Austin, Texas, and hopes to introduce the driverless cabs in several other cities soon.
Musk told analysts that the service will be available to probably 'half of the population of the U.S. by the end of the year – that's at least our goal, subject to regulatory approvals.'
'We're in this weird transition period where we'll lose a lot of incentives in the U.S.,' Musk said, adding that Tesla 'probably could have a few rough quarters' ahead.
He added, though, 'Once you get to autonomy at scale in the second half of next year, certainly by the end of next year, I would be surprised if Tesla's economics are not very compelling.'
In early trading Thursday, Tesla share were down 8 per cent to around $305.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Finextra
23 minutes ago
- Finextra
Europe must provide more support for stablecoins or face subservience to the US dollar
Jürgen Schaaf, an economist and advisor to the European Central Bank's Market Infrastructure and Payments division, says more support should be provided for properly regulated euro-denominated stablecoins to ward off the threat posed by US dollar-backed tokens. 0 US dollar-based stablecoins currently account for some 99% of total stablecoin market capitalisation. In contrast, euro-denominated stablecoins remain marginal - with market capitalisation of less than €350 million. Their appeal lies in functioning as a blockchain-based money equivalent which is liquid, globally transferable, and perceived as a stable and solid store of value. Given their growing scale and complexity, stablecoins also present knotty challenges for financial stability, monetary sovereignty, the smooth functioning of payment systems and international policy coordination Stablecoins still remain dwarfed by 'conventional' financial assets. However, they are starting to come out of their niche and become more entangled with traditional financial institutions, creating potential threats to financial stability. Says Schaaf: "A disorderly collapse could reverberate across the financial system, and the risk of contagion is a growing concern for central banks." In its Annual Economic Report 2025, the Bank for International Settlements (BIS) issued a stark warning about stablecoins. Its concerns include the potential for stablecoins to undermine monetary sovereignty, transparency issues and the risk of capital flight from emerging economies. The BIS pointed out that many stablecoins have seen substantial deviations from par, highlighting the 'fragility of their peg'. The emergence of interest-bearing stablecoins also throws up more challenges, in that, if more business started using them, they could divert deposits from traditional banks, which could jeopardise financial intermediation and hamper credit availability. This would be a bigger issue in Europe, where banks play a central role in the financial system and deposits are their main source of refinancing. Should US dollar stablecoins become widely used in the euro area - whether for payments, savings or settlement - the ECB's control over monetary conditions could be weakened, warns Schaaf. "This encroachment, though gradual, could echo patterns observed in dollarised economies, especially if users seek perceived safety or yield advantages that are not available in euro-denominated instruments," he says. "Such dynamics would be difficult to reverse given the network character of stablecoins and the economies of scale in this context. The larger their footprint, the harder these would be to unwind. If the use of US dollar-denominated stablecoins continues to increase through traditional channels, they may compete directly with euro-based instruments in cross-border transactions. In tokenised settlement, where a reliable digital cash equivalent is key, US dollar stablecoins may cement their early dominance unless credible euro alternatives materialise." The US Administration has made it clear - through executive orders, congressional testimony and social media - that its support for stablecoins goes beyond just encouraging technological innovation. The goal is twofold: to protect the US dollar's global dominance by expanding its use on digital platforms worldwide; and to reduce borrowing costs by increasing demand for US Treasuries through stablecoin reserve holdings. If Europe is to come unscathed thropugh the maelstrom, policy makers must adapt their thinking and embrace the coming disruption, says Schaaf. "While the neutrality of public institutions is often preferred, a strategic blind spot in this space could prove costly," he says. "Euro-based stablecoins, if designed to high standards and effective risk mitigation, could serve legitimate market needs. They could also reinforce the international role of the euro." He contends that Europe's stable institutional framework and rules-based approach provide a solid foundation for mitigating the risks posed. "If the Eurosystem and the European Union can build on this advantage - through robust regulation, infrastructure investment and digital currency innovation - the euro could emerge from this period of change as a stronger currency.," he concludes"In a world of shifting sands, the euro has the potential to be the bedrock on which others can build."
Reuters
23 minutes ago
- Reuters
Firefly Aerospace seeks $5.5 billion valuation in IPO as US space race heats up
July 28 (Reuters) - Space technology startup Firefly Aerospace is targeting a valuation of about $5.5 billion in its U.S. initial public offering, as investor appetite for high-growth sectors shows signs of a sustained rebound. The Cedar Park, Texas-based company is aiming to sell its shares between $35 and $39 apiece to raise as much as $631.8 million, a regulatory filing showed on Monday. The U.S. IPO market is showing signs of steady recovery in 2025 after a slump of almost three years, as easing interest rates, improved market conditions and a backlog of high-growth companies revive investor interest. Several notable listings, including neo-bank Chime (CHYM.O), opens new tab and stablecoin issuer Circle (CRCL.N), opens new tab, have rekindled optimism in recent weeks, with more firms preparing to test the waters in the second half of the year. Several billionaires and private firms are fueling a new space race in the U.S., pouring money into rockets, satellites and lunar missions, including Elon Musk's SpaceX and Jeff Bezos' Blue Origin. With NASA relying more on commercial partnerships and defense spending rising, the space industry is rapidly becoming a high-stakes arena for technological dominance, national security and economic opportunity. Space startups continued to draw investor dollars in the April-June period, which was the second-strongest quarter on record for funding, an industry report showed earlier this month. Firefly Aerospace succeeded in its first attempt to land on the moon in March with its uncrewed Blue Ghost spacecraft. It expects the Blue Ghost lander to fly annual missions to the moon. The company notched a valuation of over $2 billion in a November 2024 funding round, when it had raised $175 million. It will trade on the Nasdaq under the ticker symbol 'FLY' after the IPO closes. Goldman Sachs, J.P. Morgan, Jefferies and Wells Fargo Securities are the lead underwriters.
The Independent
23 minutes ago
- The Independent
Former Pizza Express boss in talks with Wildwood restaurant owner
The restaurant firm behind the Wildwood chain has said it is in talks with restaurant tycoon David Page over a deal which could see him join the company and secure new investment. Shares in the company have dropped to a record low in recent weeks in the face of tumbling revenues as it seeks to turn around its fortunes. On Monday, it confirmed it has held talks with David Page, the former boss of Pizza Express and Franco Manca owner The Fulham Shore over a move which would see him appointed to the group's board. Tasty, which also owns the Dim T brand, said it is also in talks with Fulham Shore finance director Nicholas Wong as part of the proposed deal. The group is also 'evaluating funding options' as a result, which could include raising cash through an equity placing. It comes after Sky News reported that Mr Page is seeking to secure close to £10 million in new funding from institutional investors. The report indicated that a deal could see Mr Page installed as executive chairman of Tasty and rename the business as Bow Street Group on the London Stock Exchange. Tasty, which runs 36 restaurants, saw revenues tumble by 21.9% last year due to a restructuring. Last year, the group closed 18 restaurants as part of its turnaround efforts. Shares in the company shot 81% higher to 1p following the update on Monday. This gives the company a market capitalisation worth just under £2 million.
