The Tesla Revolt
Donald Trump may be pleased enough with Elon Musk, but even as the Tesla CEO is exercising his newfound power to essentially undo whole functions of the federal government, he still has to reassure his investors. Lately, Musk has delivered for them in one way: The value of the company’s shares has skyrocketed since Trump was reelected to the presidency of the United States. But Musk had much to answer for on his recent fourth-quarter earnings call—not least that in 2024, Tesla’s car sales had sunk for the first time in a decade. Profits were down sharply too. Usually, when this happens at a car company, the CEO issues a mea culpa, vows to cut costs, and hypes vehicles coming to market soon.
Instead, Musk beamed about robotics, artificial intelligence, and Tesla’s path to being “worth more than the next top five companies combined.” This is the vision he has been selling investors for years: Making cars—a volatile, hypercompetitive business with infamously low profit margins—was only the start for Tesla. Its future business will be making fleets of self-driving taxis and humanoid robots trained for thankless manual labor. Whether his vision has any connection to reality is hotly debated by many AI and robotics experts, but most Wall Street analysts put their faith in Musk. And he has, at times, delivered on wildly ambitious goals. Shares jumped again after the call.
Musk needs that belief to hold. Tesla’s stock price is the largest source of his enormous wealth and, by extension, his influence; if his plans succeed, that stock is also his clearest shot at achieving trillionaire status. Right now, though, Tesla’s primary business is still selling cars that people drive, and Musk himself may be the biggest reason that faith in Tesla could falter.