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Yahoo
7 hours ago
- Automotive
- Yahoo
Tesla ETFs: What's Next After Worst Q2 in a Decade?
Tesla TSLA reported dismal first-quarter 2025 results, missing estimates for earnings and revenues. The company posted its biggest decline in quarterly revenues in more than a decade, as CEO Elon Musk's increasingly polarizing political activity raised concerns about the electric vehicle maker's brand image and leadership focus. Shares of Tesla dropped 4.7% in after-market hours yesterday. The dismal result has put ETFs with a substantial allocation to this luxury carmaker in focus. These include Simplify Volt TSLA Revolution ETF TESL, Consumer Discretionary Select Sector SPDR Fund XLY, The Nightview Fund NITE, Fidelity MSCI Consumer Discretionary Index ETF FDIS and Vanguard Consumer Discretionary ETF VCR. Q2 Earnings in Focus Adjusted earnings per share came in at 33 cents, missing the Zacks Consensus Estimate of 39 cents and below the year-ago earnings of 30 cents. Revenues dropped 12% year over year to $22.5 billion and fell short of the Zacks Consensus Estimate of $22.43 billion. The weak results were largely due to lower automotive revenues, which fell 16% year over year as a result of a slump in vehicle this month, Tesla reported a decline in global deliveries for the second quarter of 2025, marking its second consecutive quarterly drop. This leading electric carmaker delivered 384,122 (373,728 Model 3/Y and 10,394 other models) cars worldwide in the second quarter. The figure declined 13.5% from the year-ago quarter, marking the worst year-over-year decline in deliveries in the company's history. Tesla produced 410,244 (396,835 Model 3/Y and 13,409 other models) vehicles during the quarter (read: Will Tesla's Worst-Ever Q2 Vehicle Sales Drop Shake its ETFs?). Musk warned of potentially 'rough quarters' ahead, as the company continues to grapple with slowing sales. Robotaxi Launch Promises Growth Tesla has officially begun the rollout of its paid robotaxi service in Austin, TX, marking a significant step forward in its autonomous vehicle ambitions. The company plans to expand the driverless cab service to several other cities the post-earnings call, CEO Elon Musk said Tesla aims to make the robotaxi service available to 'probably half of the population of the U.S. by the end of the year,' subject to regulatory approvals. He also reiterated his expectation of having hundreds of thousands of robotaxis on U.S. roads by the end of next year, signaling an aggressive expansion timeline (read: Capitalize on Tesla's Robotaxi Momentum With These ETFs). Other Growth Drivers One way Tesla plans to boost sales is by launching a more affordable vehicle. The company now aims to bring this lower-cost model to market in the final quarter of the year, delayed from its earlier target of Elon Musk also said he expects Tesla's so-called Full Self-Driving (FSD) software to receive regulatory approval in parts of Europe by year-end. This timeline is a shift from his earlier projection of March. Despite its name, the FSD system is not fully autonomous. It remains a driver-assistance feature and requires active human the robotics space, Musk projected massive growth for Tesla's humanoid robot, Optimus. He said the company plans to scale production to 100,000 units per month within five years. Musk's Political Engagements Painful for Tesla Investor anxiety has intensified in recent weeks over CEO Elon Musk's ability to steer Tesla effectively as he deepens his involvement in politics. In July, Musk announced the formation of a new political party, putting him at odds with U.S. President Donald Trump. Just weeks earlier, he had pledged to reduce his engagement in public sector roles and refocus on his political entanglements have also sparked international backlash. His vocal support for Germany's far-right AfD party has dented Tesla's reputation in Europe, while his prior role leading the short-lived U.S. Department of Government Efficiency and the associated federal layoffs has drawn criticism at combination of falling sales, leadership churn and Musk's political pivot has cast a shadow over Tesla's near-term outlook, with investors questioning whether the company's visionary CEO can remain focused on the road ahead. ETFs in Focus Simplify Volt TSLA Revolution ETF (TESL): It uses an active management strategy to capture the potential of Tesla's stock price movements while implementing an advanced options overlay to manage downside risks. Consumer Discretionary Select Sector SPDR Fund (XLY): Tesla makes up for 16.5% of the Nightview Fund (NITE): Tesla accounts for 14.9% of the MSCI Consumer Discretionary Index ETF (FDIS): Tesla accounts for 14.7% of the Consumer Discretionary ETF (VCR): Tesla accounts for 14.5% of the assets. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
12 hours ago
- Automotive
- Yahoo
As Tesla Gambles With Its Right to Sell EVs in California, How Should You Play TSLA Stock?
Tesla (TSLA) is no stranger to controversy, but the stakes may be higher than ever as the electric vehicle giant becomes entangled in a high-stakes legal showdown with the California Department of Motor Vehicles (DMV). At the center of the dispute are allegations that Tesla misled consumers by overstating the capabilities of its Autopilot and Full Self-Driving (FSD) technologies — claims that, if upheld, could result in the temporary suspension of the company's dealer license in California. This legal battle comes at a particularly vulnerable time for Tesla. Just a day ago, the company reported its steepest revenue decline in over a decade, and CEO Elon Musk warned of 'a few rough quarters' ahead. For investors already concerned about Tesla's weakening fundamentals, the prospect of regulatory penalties in a key market only adds to the uncertainty. More News from Barchart NVDA Broken Wing Butterfly Trade Targets A Profit Zone Between 150 and 160 Is Opendoor Stock a Buy at New 52-Week Highs? Can Lucid Motors Stock Hit $7 in 2025? Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! In light of all this, investors are left with a tough question: Should you hold, buy the dip, or head for the exits? Let's take a closer look. About Tesla Stock Tesla (TSLA) is a prominent innovator dedicated to accelerating the global transition to sustainable energy. The Elon Musk-led powerhouse designs, develops, manufactures, leases, and sells high-performance fully electric vehicles, solar energy generation systems, and energy storage products. It also offers maintenance, installation, operation, charging, insurance, financial, and various other services related to its products. In addition, the company is increasingly focusing on products and services centered around AI, robotics, and automation. Its market cap currently stands at $1.07 trillion. Shares of the EV maker have fallen 24.6% on a year-to-date basis. Tesla Sales Could Be Temporarily Suspended in California This week, Tesla faces off with the California Department of Motor Vehicles (DMV) over allegations that it overstated the capabilities of its Autopilot and Full Self-Driving technology, thereby misleading consumers. The stakes are high as the regulator aims to suspend Tesla's dealer license, which allows the company to sell vehicles in its biggest market in the U.S. The California DMV has been engaged in a years-long legal dispute with Tesla over how the automaker markets its 'Autopilot' and 'Full Self-Driving Capability' advanced driver assistance (ADAS) systems. The agency alleges that Tesla is misrepresenting the capabilities of its ADAS through both the naming of the systems and the way the company and its CEO promote them. More precisely, the California regulator asserts that Tesla violated state law by making 'untrue or misleading' statements in 2021 and 2022 while promoting its vehicles with advanced driver-assistance systems, including claims that the features were 'able to conduct short and long-distance trips with no action required in the driver's seat.' Meanwhile, Tesla has contended in legal filings that the statements in question are protected under the First Amendment of the U.S. Constitution as free speech. The company's lawyers also argue that the marketing statements cited by the DMV have been taken out of context and that the regulator is overlooking Tesla's warnings and disclosures regarding the systems. 'Tesla repeatedly and explicitly makes clear that its vehicles are not autonomous and require active driver supervision,' the company said in a February 2024 filing. Now, tensions are rising as the court holds a five-day hearing in Oakland on the case, which began on Monday and will run throughout the week. Notably, the hearing before an administrative agency judge coincides with an ongoing jury trial in Miami, where Tesla faces allegations that Autopilot was partially responsible for a 2019 crash involving a distracted Model S driver that resulted in a pedestrian's death. The DMV is now seeking a 30-day suspension of Tesla's dealer license in California. 'Tesla has been misleading consumers for years,' said Christopher Beatty, supervising deputy attorney general for California, who is representing the state's DMV, during his opening statement at an administrative court hearing in Oakland on Monday. Also, Melanie Rosario, a commander-sergeant with the DMV, testified in court Monday that Tesla's branding of its Autopilot and Full Self-Driving features was 'misleading' and 'contradictory,' stating that the terms suggest the vehicle is capable of driving itself. In Tesla's opening statement, the company's lawyers contended that it is 'impossible for a reasonable consumer to be misled' by the branding of its products, while also claiming that the company is 'getting closer every day' to delivering fully autonomous vehicles. If the DMV succeeds in temporarily suspending Tesla's right to sell vehicles in California, it could severely impact the company's performance this quarter. As noted earlier, California is Tesla's largest market in the U.S., accounting for roughly a third of the country's EV sales. What makes the situation even more ironic is that the looming end of the federal tax credit in Q4 is driving a surge in demand into the current quarter. And much of that demand was expected to come from California. Tesla Warns of Rough Patch Ahead Tesla released its Q2 earnings results yesterday after the market closed, and the stock is currently down 8% after the EV maker reported its biggest revenue decline in at least a decade. CEO Elon Musk also warned of tough times ahead for the company as incentives such as the EV tax credit phase out in the U.S. 'We probably could have a few rough quarters,' Musk said. Musk's remarks were his most direct yet regarding the impact of the tax bill signed by President Donald Trump this month on Tesla. Besides phasing out $7,500 tax credits for EV purchases, the law also dismantled federal fuel-economy standards that have been a significant source of revenue for Tesla over the years. Let's take a closer look at Tesla's Q2 figures. The company's total revenue slumped 11.8% year-over-year to $22.5 billion. Although the top-line figure was better than some feared, it still represented the company's worst revenue drop in more than a decade. The decline in total revenue was once again mainly driven by a downturn in Tesla's core automotive segment, which saw a 16% year-over-year revenue drop to $16.7 billion. Tesla attributed the decline to a 14% drop in vehicle deliveries during the second quarter and lower revenue from regulatory credit sales. Notably, revenue from regulatory compliance credits that Tesla sells to competing automakers dropped to $439 million in Q2, down 26% from the previous quarter and 51% year-over-year. As mentioned earlier, this revenue stream is at risk following the tax law signed by Trump this month, which removed the penalties automakers faced for not complying with federal fuel-economy standards. Another interesting thing I noticed is that automotive revenue fell at a faster pace than vehicle deliveries, indicating that average selling prices continued to drop amid intense competition. While the weakness in the automotive business was expected, the biggest surprise for me was the energy segment. The energy segment had always been a bright spot in the past, helping to partially offset the challenges faced by the automotive segment. However, this time Tesla's energy business posted a 7% year-over-year revenue decline to $2.8 billion in Q2, mainly due to a decrease in the average selling price of Megapack. I view this as a major negative for the company, as it seriously undermines my earlier bullish outlook on the energy business. Meanwhile, services revenue continued to perform well, rising 17% year-over-year to $3.05 billion. On the profitability front, the operating margin collapsed in Q2, dropping 219 basis points year-over-year to 4.1%, highlighting a clear erosion of competitive advantage. Tesla's adjusted EPS plunged 23% year-over-year to $0.40, but was in line with expectations. On the positive side, Musk said during the earnings call that production of a more affordable EV had started, with sales potentially beginning in the fourth quarter. The model, which Musk described as similar to the Model Y, is considered vital for boosting sales. As for the robotaxi, Tesla stated that it plans to improve and expand the service, which was launched this summer in Austin. The company is pursuing regulatory approval to launch in the San Francisco Bay Area, as well as in Nevada, Arizona, Florida, and several other places, according to Musk. 'We'll probably have autonomous ride-hailing in about half the population of the U.S. by the end of the year,' Musk said. 'That's at least our goal, subject to regulatory approvals.' What Do Analysts Expect For TSLA Stock? Wall Street analysts remain split on Tesla, with the stock currently carrying a consensus 'Hold' rating. While 12 analysts rate the stock as a 'Strong Buy' and two as a 'Moderate Buy,' 16 recommend holding, and 10 have issued a 'Strong Sell' rating. Notably, the stock currently trades above its average price target of $297.86. Analysts tracking the company foresee a 28.3% year-over-year drop in its adjusted EPS to $1.74 for fiscal 2025, while revenue is projected to fall 5.76% year-over-year to $92.07 billion. The Bottom Line on TSLA Stock I am deeply disappointed with Tesla's Q2 results, and more importantly, Musk indicated that the company would face even more challenges in the coming quarters. The revenue decline in the energy business nearly pushed me to issue a 'Sell' rating, but for now, I'm sticking with a 'Hold' to see how the launch of the new affordable model and the robotaxi expansion unfold. And let's not forget about the ongoing lawsuit with the California DMV. If Tesla's license is suspended this quarter, it would affect the company's sales during a very critical period and could also prompt additional regulations on how automakers market advanced driver-assistance systems. Therefore, I recommend keeping a close eye on the outcome here. On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Globe and Mail
14 hours ago
- Automotive
- Globe and Mail
Tesla ETFs: What's Next After Worst Q2 in a Decade?
Tesla TSLA reported dismal first-quarter 2025 results, missing estimates for earnings and revenues. The company posted its biggest decline in quarterly revenues in more than a decade, as CEO Elon Musk's increasingly polarizing political activity raised concerns about the electric vehicle maker's brand image and leadership focus. Shares of Tesla dropped 4.7% in after-market hours yesterday. The dismal result has put ETFs with a substantial allocation to this luxury carmaker in focus. These include Simplify Volt TSLA Revolution ETF TESL, Consumer Discretionary Select Sector SPDR Fund XLY, The Nightview Fund NITE, Fidelity MSCI Consumer Discretionary Index ETF FDIS and Vanguard Consumer Discretionary ETF VCR. Q2 Earnings in Focus Adjusted earnings per share came in at 33 cents, missing the Zacks Consensus Estimate of 39 cents and below the year-ago earnings of 30 cents. Revenues dropped 12% year over year to $22.5 billion and fell short of the Zacks Consensus Estimate of $22.43 billion. The weak results were largely due to lower automotive revenues, which fell 16% year over year as a result of a slump in vehicle sales. Earlier this month, Tesla reported a decline in global deliveries for the second quarter of 2025, marking its second consecutive quarterly drop. This leading electric carmaker delivered 384,122 (373,728 Model 3/Y and 10,394 other models) cars worldwide in the second quarter. The figure declined 13.5% from the year-ago quarter, marking the worst year-over-year decline in deliveries in the company's history. Tesla produced 410,244 (396,835 Model 3/Y and 13,409 other models) vehicles during the quarter (read: Will Tesla's Worst-Ever Q2 Vehicle Sales Drop Shake its ETFs?). Musk warned of potentially 'rough quarters' ahead, as the company continues to grapple with slowing sales. Robotaxi Launch Promises Growth Tesla has officially begun the rollout of its paid robotaxi service in Austin, TX, marking a significant step forward in its autonomous vehicle ambitions. The company plans to expand the driverless cab service to several other cities soon. On the post-earnings call, CEO Elon Musk said Tesla aims to make the robotaxi service available to 'probably half of the population of the U.S. by the end of the year,' subject to regulatory approvals. He also reiterated his expectation of having hundreds of thousands of robotaxis on U.S. roads by the end of next year, signaling an aggressive expansion timeline (read: Capitalize on Tesla's Robotaxi Momentum With These ETFs). Other Growth Drivers One way Tesla plans to boost sales is by launching a more affordable vehicle. The company now aims to bring this lower-cost model to market in the final quarter of the year, delayed from its earlier target of June. CEO Elon Musk also said he expects Tesla's so-called Full Self-Driving (FSD) software to receive regulatory approval in parts of Europe by year-end. This timeline is a shift from his earlier projection of March. Despite its name, the FSD system is not fully autonomous. It remains a driver-assistance feature and requires active human supervision. In the robotics space, Musk projected massive growth for Tesla's humanoid robot, Optimus. He said the company plans to scale production to 100,000 units per month within five years. Musk's Political Engagements Painful for Tesla Investor anxiety has intensified in recent weeks over CEO Elon Musk's ability to steer Tesla effectively as he deepens his involvement in politics. In July, Musk announced the formation of a new political party, putting him at odds with U.S. President Donald Trump. Just weeks earlier, he had pledged to reduce his engagement in public sector roles and refocus on his businesses. Musk's political entanglements have also sparked international backlash. His vocal support for Germany's far-right AfD party has dented Tesla's reputation in Europe, while his prior role leading the short-lived U.S. Department of Government Efficiency and the associated federal layoffs has drawn criticism at home. The combination of falling sales, leadership churn and Musk's political pivot has cast a shadow over Tesla's near-term outlook, with investors questioning whether the company's visionary CEO can remain focused on the road ahead. ETFs in Focus Simplify Volt TSLA Revolution ETF (TESL): It uses an active management strategy to capture the potential of Tesla's stock price movements while implementing an advanced options overlay to manage downside risks. Consumer Discretionary Select Sector SPDR Fund (XLY): Tesla makes up for 16.5% of the portfolio. The Nightview Fund (NITE): Tesla accounts for 14.9% of the portfolio. Fidelity MSCI Consumer Discretionary Index ETF (FDIS): Tesla accounts for 14.7% of the portfolio. Vanguard Consumer Discretionary ETF (VCR): Tesla accounts for 14.5% of the assets. Want key ETF info delivered straight to your inbox? Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA): Free Stock Analysis Report Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
CNBC
20 hours ago
- Automotive
- CNBC
Here's what Wall Street thinks about Tesla's second-quarter results
Wall Street ratings were a mixed bag after Tesla's second-quarter financial results. Tesla on Wednesday reported a second straight quarter of declining automotive sales , which came in at $16.7 billion for the period, down from $19.9 billion in the same quarter last year. The company also missed on top and bottom lines. Shares of the electric vehicle maker plunged 6% in premarket trading, piling on its roughly 17.7% year to date loss. Tesla has struggled in key markets such as China and Europe and notably lost market share to Chinese companies that have released lower cost EV models. Still, analysts have a wide range of ratings and price targets on Tesla shares. It's a company that bulls tend to stick by for its future value in technologies such as robotaxis, not necessarily its near-term innovation. Analysts polled by LSEG have a consensus price target on Tesla that implies more than 9% downside for Tesla shares. Of the 54 analysts covering the stock, five rate it a strong buy, while 19 rate it a buy and 20 maintain a hold. Ten have an underperform or sell rating on shares. Here's a look at what some Wall Street majors said after the EV maker's earnings release: Goldman Sachs keeps neutral rating, lifts price target to $300 Analyst Mark Delaney raised his 12-month price target to $300 from $285. He said he expects Tesla's revenue growth and profits to improve in 2026, but is keeping his 2025-2027 estimates below the FactSet consensus. "We believe a key focus for investors going forward will be the ability for revenue and profits to reaccelerate driven by Tesla's AI enabled products (e.g. robotaxis, FSD) and new vehicle launches against a more difficult policy environment and given competition," Delaney said in a Wednesday note. "Management did note the potential for the end of IRA EV purchase incentives in 4Q to temporarily pressure fundamentals, but the shift to AI enabled products including robotaxis/FSD and Optimus would be a substantial long-term driver." Wells Fargo reiterates underweight rating, $120 price target Wells Fargo sees major room for downside ahead. Analyst Colin Langan's price target implies Tesla shares stand to lose nearly 64% from their latest close of $332.56 per share. Tesla shares are down in post-earnings trading "despite a Q2 op margin beat as fundamentals look worse into 2H. TSLA did not provide new delivery guidance & warned of added pressure from tariffs, IRA & OBBB. We agree with 2H concerns & remain UW," Langan wrote in a Thursday note. He remains cautious on robotaxis, even after CEO Elon Musk's bullish commentary that robotaxis will "probably address half the population of the U.S." by year-end, and that Tesla expects an Optimus 3 prototype by the end of the year to scale next year. Langan said that scaling robotaxis and Optimus humanoids could take longer than expected, which he believes raises risks as Tesla's core business weakens. Morgan Stanley maintains overweight rating, $410 price target Analyst Adam Jonas is a well-known Tesla bull. He reiterated Tesla as a top pick and kept a target price that implies about 23% potential upside. Still, Jonas lowered his fiscal year 2025 earnings per share expectations by 14% compared to prior forecasts, mostly driven by lower deliveries and higher operating expenses. "2Q numbers were a slight beat with FCF near break-even. Tesla is crossing the chasm to autonomy while absorbing slower volume, EV incentive elimination, tariffs and investing in new initiatives that may not make margins for years," Jonas said in a note about Tesla's results. "Our OW rating and $410 price target are underpinned by our belief that Tesla's capabilities in key areas of physical AI ... offer growth and margin opportunities that greatly exceed those of the traditional EV business, which is under pressure," he added. "we struggle to think of any other company as well positioned as Tesla in terms of data, robotics, energy, AI, manufacturing and supporting infrastructure Bank of America reiterates neutral rating, $341 price target Analyst Federico Merendi anticipates "rough quarters ahead" for Tesla, echoing Musk's commentary. His neutral rating on the stock relies on Tesla's current market advantage in autonomous driving initiatives and physical AI applications, he said. "Tesla commentary on future developments in terms of real-world AI (Autonomous vehicles/robotaxi and Optimus) remains bullish. However, the company is facing challenging times," he wrote in a note to clients. "Commentary also suggests that the tariff impact may increase in the future. However, by end of 2026, management thinks that Tesla's economics will be compelling with autonomy at scale." Evercore ISI maintains in-line rating, $235 price target Analyst Chris McNally expects Tesla's third-quarter results to see the downbeat effects of slower EV launches and tariff impacts. "The LT negative EPS revision trend has continued, unabated," he said in a note. "We believe there will be a sharper cons move post Q3."
Time of India
a day ago
- Automotive
- Time of India
Tesla faces turbulent quarters as US cuts EV incentives; Musk bets big on autonomy
Tesla is bracing for a few "rough quarters" ahead as reduced government support for electric vehicles in the United States threatens to dampen sales, CEO Elon Musk said during the company's Q2 earnings call on Wednesday. Shares of the electric carmaker fell nearly 5 per cent following the remarks, which reflected concerns about slowing demand and delayed production timelines, as per Reuters. The electric vehicle giant posted its worst quarterly sales drop in over a decade, with revenue falling 12 per cent year-on-year to $22.5 billion for the April–June period, below analyst expectations of $22.74 billion, according to LSEG. Adjusted earnings per share came in at 40 cents, missing the 43-cent consensus. Sluggish sales and lower subsidies cloud outlook Tesla's vehicle deliveries declined 13.5 per cent in Q2, despite the release of an updated Model Y, its best-selling SUV. Compounding the pressure, US tax credits of up to $7,500 for EV buyers are set to be scaled back later this year under President Donald Trump's administration. The company's automotive regulatory credit revenue also dropped sharply—down 51 per cent —impacting both its top line and profit. These credits are sold to other automakers struggling to meet emissions targets. Despite the earnings miss, Tesla's automotive gross margin (excluding regulatory credits) stood at 14.96 per cent , slightly above expectations, helped by cost reductions in manufacturing. Affordable EV delayed, autonomy remains key bet Musk acknowledged that Tesla's more affordable EV, initially planned for release by mid-2025, would see slower-than-expected production ramp-up. Chief Financial Officer Vaibhav Taneja said limited volumes had been produced by the end of June, but the company stopped short of offering a timeline for wider rollout or disclosing key specifications. In a moment of levity during the call, Musk jokingly described the vehicle as 'just a Model Y,' hinting at a stripped-down version of the existing SUV. The real focus, however, remains on Tesla's long-term push into autonomous mobility. The company is banking on revenue from its Full Self-Driving (FSD) software and a future robotaxi business, with volume production of its custom-built Cybercab expected in 2026. A small trial of robotaxi services has already begun in Austin, Texas, and the company is seeking regulatory approval to expand autonomous ride-hailing in several US states, including Nevada, Arizona, and Florida. 'Autonomy is the story,' Musk told investors, projecting that the robotaxi business could start materially contributing to Tesla's financials by late 2026. Political noise and leadership exits raise questions Beyond operational challenges, investor concerns are mounting over Musk's ability to focus on Tesla amid his broader ambitions. The billionaire recently announced the formation of a new political party, locking horns with the Trump administration. Despite pledging to reduce political engagements, Musk's increasing public involvement continues to divide attention. The recent departure of several top executives, including a trusted lieutenant overseeing sales and manufacturing in North America and Europe, has only added to the uncertainty. While Tesla's near-term prospects appear challenged by policy changes, pricing pressure, and intensifying competition—particularly from low-cost Chinese EVs—the company is betting on innovation and future services to drive growth. Whether its autonomy-focused strategy and a new, lower-cost model can deliver remains to be seen.
