How bad is the trouble at Tesla?
However, Musk insists Tesla isn't 'on the ragged edge of death.' But a closer look at the numbers suggests otherwise. Tesla isn't making money from selling cars anymore and only stayed profitable last quarter by selling $US595 million worth of regulatory credits to rivals. Without those lifelines, the company would be deep in the red.
And those regulatory credits might not be around much longer. With the Trump administration aiming to axe federal emissions rules and strip California and other states of their tougher clean air standards, Tesla's side hustle could soon vanish, leaving a hole in its balance sheet.
Read more Tesla Robotaxi revealed
Meanwhile, Tesla's market share is under siege. Once the undisputed leader in EVs, Tesla is now losing ground in China and Europe, even as overall EV sales keep climbing. Chinese automaker BYD is about to snatch Tesla's crown as the world's top EV seller which will be a symbolic blow.
Making matters worse is Musk himself. His increasingly outspoken political activities — from slashing federal agencies to backing far-right parties overseas — are turning off buyers and investors alike. Even Tesla fans on Wall Street are nervous that the brand has taken lasting damage, despite Musk's recent claims he'll dial back his political involvement.
Still, Musk remains upbeat. He told investors Tesla has weathered worse and is still set up for a bright future. But the hard data tells another story: Tesla's core automotive profit margin — once an industry-leading 30 per cent — has shrunk to just 12.5 per cent, its lowest level in over a decade.
It's a stunning reversal for a company that, not long ago, was America's most profitable carmaker and the world's most valuable automaker by a mile.
Part of the problem is surging competition. Legacy carmakers and newcomers alike are flooding the market with compelling EVs, especially in China. And while Tesla still has plenty of believers, even they acknowledge the brand has lost some of its glow.
Tesla's big bet now? Robotaxis. Musk is promising a driverless ride-hailing service, starting in Austin, Texas, alongside humanoid robots working in Tesla factories. Investors briefly cheered news that U.S. regulators are relaxing rules on autonomous vehicles, sending Tesla shares up 10 per cent. But the reality check is harsh: major rivals like GM and Ford have scaled back their robotaxi dreams, calling them unprofitable for the foreseeable future.
Even Musk has admitted to overhyping Tesla's self-driving timelines, joking last year that he's 'the boy who cried FSD.'
Now, with rising costs, intensifying competition, regulatory uncertainty, and a battered brand, Tesla faces a reality that can't be spun with optimism alone. The future may still be electric — but Tesla's dominance is no longer guaranteed.
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RNZ News
3 hours ago
- RNZ News
Tesla ordered by Florida jury to pay $414m in fatal Autopilot crash
By Jonathan Stempel and Abhirup Roy , Reuters Photo: Jakub Porzycki/NurPhoto/Getty Images via CNN Newsource A Florida jury has found Tesla liable to pay US$243 million (NZ$414m) to victims of a 2019 fatal crash of an Autopilot-equipped Model S, a verdict that could encourage more legal action against Elon Musk's electric vehicle company. The Friday (local time) verdict is a rare win for victims of accidents involving Autopilot. Musk has been pushing to rapidly expand Tesla's recently launched robotaxi business based on an advanced version of its driver assistance software. Tesla shares fell 1.8 percent on Friday and are down 25 percent this year. Jurors in Miami federal court awarded the estate of Naibel Benavides Leon, as well as her former boyfriend Dillon Angulo, $129m in compensatory damages plus $200m in punitive damages, according to a verdict sheet. Tesla was held liable for 33 percent of the compensatory damages, or $42.6m. Jurors found the driver, George McGee, liable for 67 percent, but he was not a defendant and will not have to pay his share. "Tesla designed Autopilot only for controlled-access highways yet deliberately chose not to restrict drivers from using it elsewhere, alongside Elon Musk telling the world Autopilot drove better than humans," Brett Schreiber, a lawyer for the plaintiffs, said in a statement. "Today's verdict represents justice for Naibel's tragic death and Dillon's lifelong injuries," he added. Tesla said it will appeal. "Today's verdict is wrong and only works to set back automotive safety and jeopardise Tesla's and the entire industry's efforts to develop and implement life-saving technology," the company said. The plaintiffs had sought $345m in damages. Their lawyers said the trial was the first involving the wrongful death of a third party resulting from Autopilot. Tesla has faced many similar lawsuits over its vehicles' self-driving capabilities, but they have been resolved or dismissed without going to trial. In June, a judge rejected Tesla's bid to dismiss the Florida case. Experts said Friday's verdict may spur more lawsuits and could make future settlements more costly. "It's a big deal," said Alex Lemann, a law professor at Marquette University. "This is the first time that Tesla has been hit with a judgment in one of the many, many fatalities that have happened as a result of its Autopilot technology." The verdict could also impede efforts by Musk, the world's richest person, to convince investors that Tesla can become a leader in so-called autonomous driving for private vehicles as well as robotaxis it plans to start producing next year. As Tesla's electric vehicle sales fall, much of its nearly $1 trillion market value hinges on Musk's ability to pivot the company into robotics and artificial intelligence. The trial concerned a 25 April 2019 incident where George McGee drove his 2019 Model S at about 100kmh through an intersection into the victims' parked Chevrolet Tahoe as they were standing beside it on a shoulder. McGee had reached down to pick up a cellphone he dropped on his car's floorboard and allegedly received no alerts as he ran a stop sign and stop light before hitting the victims' SUV. Benavides Leon was allegedly thrown 23m to her death, while Angulo suffered serious injuries. "We have a driver who was acting less than perfectly, and yet the jury still found Tesla contributed to the crash," said Philip Koopman, a Carnegie Mellon University engineering professor and expert in autonomous technology. "The only way the jury could have possibly ruled against Tesla was by finding a defect with the Autopilot software," he added. "That's a big deal." Tesla, in its statement, said McGee was entirely at fault. "To be clear, no car in 2019, and none today, would have prevented this crash," the company said. "This was never about Autopilot; it was a fiction concocted by plaintiffs' lawyers blaming the car when the driver, from day one, admitted and accepted responsibility." - Reuters
Otago Daily Times
11 hours ago
- Otago Daily Times
Tesla ordered to pay $243 million over fatal Autopilot crash
A Florida jury has found Tesla liable to pay $US243 million ($NZ414m) to victims of a 2019 fatal crash of an Autopilot-equipped Model S, a verdict that could encourage more legal action against Elon Musk's electric vehicle company. The verdict is a rare win for victims of accidents involving Autopilot. Musk has been pushing to rapidly expand Tesla's recently launched robotaxi business based on an advanced version of its driver assistance software. Tesla shares fell 1.8% on Friday, and are down 25% this year. Jurors in Miami federal court awarded the estate of Naibel Benavides Leon, as well as her former boyfriend Dillon Angulo, $US129 million in compensatory damages plus $US200 million in punitive damages, according to a verdict sheet. Tesla was held liable for 33% of the compensatory damages, or $US42.6 million. Jurors found the driver George McGee liable for 67%, but he was not a defendant and will not have to pay his share. "Tesla designed Autopilot only for controlled-access highways yet deliberately chose not to restrict drivers from using it elsewhere, alongside Elon Musk telling the world Autopilot drove better than humans," Brett Schreiber, a lawyer for the plaintiffs, said in a statement. "Today's verdict represents justice for Naibel's tragic death and Dillon's lifelong injuries," he added. Tesla said it would appeal. "Today's verdict is wrong and only works to set back automotive safety and jeopardize Tesla's and the entire industry's efforts to develop and implement life-saving technology," the company said. The plaintiffs had sought $US345 million of damages. Their lawyers said the trial was the first involving the wrongful death of a third party resulting from Autopilot. IMPACT ON FUTURE CASES Tesla has faced many similar lawsuits over its vehicles' self-driving capabilities, but they have been resolved or dismissed without getting to trial. In June, a judge rejected Tesla's bid to dismiss the Florida case. Experts said Friday's verdict may spur more lawsuits, and could make future settlements more costly. "It's a big deal," said Alex Lemann, a law professor at Marquette University. "This is the first time that Tesla has been hit with a judgment in one of the many, many fatalities that have happened as a result of its Autopilot technology." The verdict could also impede efforts by Musk, the world's richest person, to convince investors that Tesla can become a leader in so-called autonomous driving for private vehicles as well as robotaxis it plans to start producing next year. As Tesla's electric vehicle sales fall, much of its nearly $US1 trillion market value hinges on Musk's ability to pivot the company into robotics and artificial intelligence. DRIVER'S ROLE The trial concerned an April 25, 2019 incident in which George McGee drove his 2019 Model S at about 62mph (100kmh) through an intersection into the victims' parked Chevrolet Tahoe as they were standing beside it on a shoulder. McGee had reached down to pick up a cellphone he dropped on his car's floorboard and allegedly received no alerts as he ran a stop sign and stop light before hitting the victims' SUV. Benavides Leon was allegedly thrown 23 metres to her death, while Angulo suffered serious injuries. "We have a driver who was acting less than perfectly, and yet the jury still found Tesla contributed to the crash," said Philip Koopman, a Carnegie Mellon University engineering professor and expert in autonomous technology. "The only way the jury could have possibly ruled against Tesla was by finding a defect with the Autopilot software," he added. "That's a big deal." Tesla, in its statement, said McGee was entirely at fault. "To be clear, no car in 2019, and none today, would have prevented this crash," the company said. "This was never about Autopilot; it was a fiction concocted by plaintiffs' lawyers blaming the car when the driver - from day one - admitted and accepted responsibility."
NZ Herald
11 hours ago
- NZ Herald
Tesla liable for $243m in fatal Key Largo crash, jury blames autopilot
In his closing argument Thursday, Joel Smith, an attorney representing Tesla, lay the blame for the crash solely on McGee. 'He said he was fishing for his phone,' Smith said. 'It's a fact. That happens in any car. That isolates the cause. The cause is, he dropped his cellphone.' On rebuttal, plaintiff's attorney Brett Schreiber told jurors that Tesla promoted the autopilot feature knowing it increased the likelihood of distracting drivers. Schreiber displayed a 2016 statement by Musk saying the emergency braking feature could detect anything, including an alien spaceship or a hunk of metal in the road. Tesla's driver assistance technology was blamed for enabling driver distraction, leading to the fatal crash. Photo / Getty Images 'In the showroom, it's the greatest car ever made,' Schreiber said. 'In the courtroom, they say it's a jalopy. 'Tesla knew for years that its product was defective,' he added. 'Despite that people were using autopilot irresponsibly. This was a case of systematic failure.' The outcome is a massive blow to Musk, who has staked the future of his company on fully autonomous driving. Tesla is facing several similar lawsuits across the country that allege the CEO and his company have overstated the capabilities of the technology. Friday's verdict could now open Tesla up to more liability in the future. The verdict comes at a particularly vulnerable moment for Tesla, which has been struggling since Musk's controversial foray into politics. The company's sales and profits tanked after Musk joined the Trump administration and led its controversial cost-cutting initiative, the US Doge Service. The billionaire left the administration after a fiery public fallout with the President over his spending Bill – but Tesla's finances have yet to recover. Tesla faced two California juries in 2023 for alleged defects and was found not liable in both cases. It has also settled at least four such cases out of court that alleged defects with its technology, including one regarding a separate autopilot-related case just days before the Miami trial was set to begin. In Oakland, California, state regulators are also fighting to remove Tesla's ability to sell vehicles in the state over allegations that it dangerously misled drivers to believe its cars could drive themselves without human oversight. That case is ongoing. In Miami, Tesla faced a highly technical and emotional three-week trial as the Benavides Leon family and Angulo attended nearly every day. The families sat through much of the testimony and attentively listened as attorneys dissected the crucial seconds leading up to the crash. The two sides sparred over whether the company's statements about autopilot were misleading, whether the company was forthcoming about critical evidence in the case – and if the crash could have been prevented at all. The case also tested public sentiment of Musk, a controversial figure known for pushing boundaries and evolving technology out to the public. Last month, Tesla launched its fully autonomous Robotaxi in Austin, despite a lack of federal regulation and clear safety guidelines. Beyond Tesla, Musk's AI chatbot, Grok, came under fire last month after launching into an antisemitic rant. The verdict could increase Tesla's future liability, amidst ongoing lawsuits and regulatory challenges. Photo / Getty Images Several days into the trial, a juror was dismissed for perceived bias against Musk. The defence said it uncovered a 'vitriolic and venomous' tirade against Musk on one of the juror's social media pages, according to a court transcript provided to the Post. In a TikTok post from earlier this year, according to the transcript, the juror states 'A good Nazi is a dead one. Do you agree? F-U Elon Musk.' The plaintiffs' attorney rested much of their defence on Musk's statements about autopilot, which they argue convinced his customers that his technology was more capable than reality. They highlighted statements from the CEO that claim autopilot has 'superhuman' sensors, that autonomous driving is a 'solved' problem and that his technology can see any object on the road including 'an alien spaceship'. They also argued that Tesla acted recklessly by allowing autopilot to function on roads it is not designed for. Tesla's decision not to limit the technology to operate only on roads that meet the criteria in its own user manuals was the subject of a 2023 recall by the National Highway Traffic Safety Administration. Advertisement Still, the defence faced a tough legal battle, as Tesla has extensive warnings in its owner's manual and the law indicates that drivers are responsible for the trajectory of the vehicle despite the type of feature engaged. McGee, told police at the scene that he took his eyes off the road to pick up a dropped cellphone. McGee said on the witness stand that he wasn't sure if he had heard Musk's comments about the technology and didn't believe they influenced his decision to buy the vehicle. He testified that he knew his Tesla 'was not self-driving' and that it was his 'job to always be alert as a driver'. He also told the jury that he believed autopilot would lead him to have an overall 'safer drive' by helping him navigate on his long commute and avoid collisions. 'My concept was that it would assist me should I have a failure … or should I make a mistake,' he said. 'And in that case I feel like it failed me.' Tesla's defence attorneys grilled Angulo and Benavides Leon's sister, Neima, about their previous lawsuit against McGee in which they settled over allegations that he operated his vehicle recklessly. The defence also mentioned the boat and home that Angulo bought since the crash. Neima Benavides and Angulo told the jury that they didn't initially know McGee was using autopilot when they sued him. But as time passed, Neima Benavides said they learned there were 'two components' in the crash. 'We have the driver,' she said. 'And we have the car too.'
