Elon Musk isn't worried about Tesla's crashing EV sales — here's why he's betting big on robotaxis and ditching budget cars
Still, Elon Musk doesn't appear too worried. In an April investor call, he said, 'I'd encourage people to look beyond the bumps and potholes of the road immediately ahead of us,' and urged them to 'lift your gaze to the bright shining citadel on the hill.' For Musk, this citadel seems to represent a future rooted in self-driving technology and robotics.
Focus turns from Budget EV to autonomous future
Tesla has moved away from plans to launch a low-cost $25,000 vehicle, commonly referred to as the Model 2. Instead, Musk is directing efforts toward developing the "Cybercab," an autonomous taxi without a steering wheel or pedals. 'I think having a regular $25,000 model is pointless. It would be silly, like it will be completely at odds with what we believe,' he said.
This shift underscores Musk's evolving vision for Tesla—not just as a car company but as a tech and mobility platform. Tesla's robotaxi and humanoid robot plans now appear central to this future.
Core car business still under pressure
While nearly 75% of Tesla's $100 billion revenue last year came from vehicle sales, the business is showing signs of strain. First-quarter profit fell by 71%, with the company staying in the black largely due to $595 million earned through regulatory credits.
Tesla executives have responded by lowering prices on existing models. 'Monthly payment is the biggest differentiator for our vehicles,' said Lars Moravy, vice president of vehicle engineering. Despite such efforts, second-quarter results expected on July 23 are projected to show a further 10% decline in sales and nearly a 20% drop in profit.
Market faith in Musk remains strong
Even with falling sales and profits, investors continue to bet on Musk's vision. Tesla's current market valuation is near $1 trillion. However, analysts estimate the value of Tesla's core auto business between $50 and $100 per share, while the company currently trades around $300.
'Most investors value Tesla's core auto business at between $50 and $100/share,' said Morgan Stanley analyst Adam Jonas. The gap suggests that much of the stock's value lies in belief in Musk's long-term ambitions beyond traditional cars.
Internal shakeups and political drama
Tesla's internal leadership has also seen recent changes. Omead Afshar, a close Musk associate who led operations in North America and Europe, has left the company. Milan Kovac, who headed the Optimus robot program, also stepped down to move overseas with his family.
On the political front, Musk's $300 million support for Donald Trump's reelection campaign took a sharp turn after an online disagreement. Trump threatened potential action against Musk, saying, 'We might have to put DOGE on Elon,' and hinted at possible deportation.
Robotaxis take the wheel
Despite setbacks in the EV market and internal management, Musk is staying the course toward Tesla's next chapter: autonomous robotaxis and AI-driven technologies. For now, that's where his focus—and the company's future—seems firmly set.
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