Tesla CEO Elon Musk is relying on the promise of robotaxis to help the company overcome tough financial times. With Tesla sales, profits, and share prices dwindling, fully autonomous vehicles could be its best hope for a rebound. What's happening?
As CNN reported, Tesla experienced a 71% drop in net income and declining sales despite market growth. The company is losing its edge over other electric vehicle makers and risks losing regulatory credits while facing rising costs due to tariffs under the Trump administration. However, Musk insists the company isn't in serious financial trouble and that it has been in worse conditions and bounced back.
"We're not on the ragged edge of death, not even close," Musk said. "There are some challenges, and I expect that this year there will probably be some unexpected bumps, but I remain extremely optimistic about the future of the company." Much of this optimism is tied to investments in robotaxis and the introduction of humanoid robots slated to work in Tesla plants.
Musk has acknowledged he's been optimistic with rollout timeframes for new developments. However, analysts including Gene Munster of Deepwater Asset Management agree that Tesla is positioned to take over a significant portion of the future rideshare market. "It is an ugly year, but they're kind of doing a setup for what should be improvements next year," Munster said.
Why are Tesla's future plans important? Tesla news has been discouraging lately: numerous lawsuits, disappointing financial revenues, and safety concerns. However, companies often experience highs and lows and adapt or pivot to stay afloat in increasingly competitive markets.
Rather than directly addressing the issues that so many analysts are discussing about Tesla, Musk is choosing to focus on new markets and technology. Other automakers, such as GM and Ford, have pulled back from autonomous vehicle development efforts because of concerns about poor profitability. Yet Tesla remains committed to self-driving EVs and is leaning in on this extension of the brand.
Other industry leaders warn that profitable fully autonomous vehicles will be a challenge for the foreseeable future. However, Musk is convinced that this is what can elevate the Tesla brand once again. What can we expect from the future of EVs?
Regardless of Tesla's business fluctuations, making your next car an EV is still one of the best things you can do for your wallet and the planet.
