Even as Tesla’s stock price continues to rise, its revenue is nearing its second consecutive year of decline. That jump has nothing to do with more cars on the road.
It’s all about robotaxis, AI, and the fantasy of fully autonomous driving promoted by Elon Musk. Meanwhile, the actual people who buy physical cars aren’t buying what Tesla is selling.
In the second half of last year, tesla stock It went out of control. It’s not for sales. It’s not because the customer did something. It was all hype. And when the company releases its fourth-quarter numbers this week, the numbers are expected to reach 440,900, down 11% from last year.
To make matters worse, Tesla itself released a forecast showing that a 15% decline is expected.
Elon’s Trump play and robotaxis have turned this year upside down
Tesla’s sales were already quite bad in the third quarter of 2024 as Elon was busy upgrading the Model Y production lines at each factory and production stalled.
The man then decided to become a full-time politician and supported President Donald Trump before publicly breaking up with him in a manner that was generally considered embarrassing. Private investors were pretty mad at him.
Tesla stock has fallen 45% over the year as Elon has been in a verbal exchange with administration officials over tariffs.
Then boom, Elon turned around and robotaxi story line Once again, the dream is that Tesla cars drive themselves and owners make money. The company launched an invite-only service in Austin in June, apparently putting safety drivers in its cars, but that didn’t stop people from quickly breaking the rules of the road.
By September, Tesla’s board had planned to reward Elon with up to $1 trillion if he delivered millions of robotaxis. By December 16, the stock had hit new highs. The company added more than $915 billion in value in eight months.
Big problems still remain. Customers don’t believe the robotaxi hype. Elon admitted it was difficult to convince people to pay for Tesla’s “full self-driving” features. This system still requires the driver to monitor everything. In California, the state could suspend Tesla’s license for 30 days over claims that Tesla lied about what FSD can actually do.
Things are not getting better in China. Tesla has tried to stand out in this space by offering driver assistance features. But BYD and Xiaomi already offer them as standard. That strategy is no longer valid.
Analysts expect BYD to outsell Tesla for the fifth consecutive quarter in global battery electric vehicle sales. strong sales in China and Europe. In Europe, Tesla has not yet received FSD approval.
Federal tax cuts end as Tesla competitors rescue EV dreams
If we look to 2026, even more problems arise. The US has abolished the EV tax credit. Elon has already said that could lead to “a few tough quarters.” The loss of government support has prompted other automakers to withdraw from EV projects. Ford said it expects to take a $19.5 billion hit from canceling its battery and EV plans.
Elon ended the year by promoting another vehicle, the CyberCab. It’s a small two-seater with butterfly doors. The first version didn’t even have a handle. But Robin Denholm, chairman of the board, told Bloomberg that the company intends to add one if regulators request it.
Garrett Nelson of CFRA totaled “Tesla investors are focused on where the company will be in five, 10, 15 years, and are really discounting the short-term outlook. The question is, can they sustain that, especially when the financial headwinds appear to be more pronounced?”
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