China's 'Kung Fu' Robot Spotlights Humanoid Robot Race
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Is Elon Musk to blame for Tesla's struggles? Experts weigh in
Tesla, the electric carmaker led by Elon Musk, suffered a sharp drop in profits over a recent three-month period as car sales slowed and tariffs hiked costs, the company said this week. Shareholders envisioned a different outcome when Tesla stock surged more than 50% in the aftermath of the November 2024 election of President Donald Trump, then a close ally of Musk. Since a recent peak in December, the majority of those gains have been erased. Musk, the company's chief executive and the world's richest person, draws attention due in part to his outspoken presence on social media and divisive stint in the White House. The recent struggles at Tesla have coincided with increased competition in the electric vehicle (EV) industry, posing a question for analysts: Is Musk partially to blame? Experts who spoke to ABC News acknowledged the surge of EV competition and credited Musk with pushing the company into potential growth areas like humanoid robots and self-driving taxis, the latter of which are being tested in Austin, Texas. The company's downturn in part reflects a transition from EVs to those new products, which have yet to generate meaningful revenue, they added. Still, the experts said, Musk bears some of the blame for the company's difficulty fending off other EV makers as well as a delayed rollout of alternate products. They also pointed to losses suffered as result of some of Trump's policies, which Musk struggled to mitigate while serving in the administration. "Musk is CEO -- the buck stops with him. As a CEO in a competitive environment, he's the one who has to have the vision and lead the troops," David Meier, a senior investment analyst at The Motley Fool, told ABC News. "But there's a lot going on in the world that impacts Tesla's business." Tesla did not immediately respond to ABC News' request for comment. Speaking on an earnings call on Wednesday, Musk said the company faces "a few rough quarters ahead." He added that, ultimately, humanoid robots and driverless taxis would make Tesla "the most valuable company in the world by far." The company's profits fell 16% over a three-month period ending in June that overlapped with the end of Musk's tenure in the White House and his ensuing public clash with Trump, an earnings release on Wednesday showed. Total revenue decreased by 12% from one year earlier, to $22.4 billion, while revenue derived from car sales dropped 16% over the second quarter of 2025 compared to a year ago, the earnings showed. In a statement, Tesla touted a "strong balance sheet," but acknowledged a "sustained uncertain macroeconomic environment resulting from shifting tariffs." The company also faces "unclear impacts from changes to fiscal policy and political sentiment," Tesla said. The company has faced heightened competition from domestic and foreign carmakers rolling out electric vehicles. Chinese EV-maker BYD outperformed Tesla in total car sales for the first time ever last year. BYD vehicles are essentially unavailable in the U.S. due to sky-high tariffs on Chinese EVs. "Part of it is outside of Tesla's control," Seth Goldstein, an analyst who studies the EV sector at research firm Morningstar, told ABC News. Goldstein cited an apparent dropoff in sales earlier this year among consumers awaiting a refresh of the company's popular Model Y. However, Goldstein added, the company has been slow to release an affordable EV model in response to a flurry of low-cost options among its rivals, which include China's BYD and traditional carmakers like Nissan and Hyundai. "Looking at Elon Musk, he's the leader of Tesla. It's fair to wonder if he was a little distracted with his political action in the first half of the year and that caused some production to slip, including production of an affordable model," Goldstein said. Musk's position at the White House, which ended in May, appeared to yield few benefits for Tesla. The company faces a pinch from several Trump policies, including the end of tax credits for EV buyers, the nixing of regulatory credits purchased from Tesla by other firms, as well as tariffs on cars and car parts. The CEO's political role also set off demonstrations at Tesla dealerships worldwide in protest of his effort to slash government spending as leader of the Department of Government Efficiency (DOGE). "It was a dark chapter and investors are glad to put it in the rear-view mirror," Dan Ives, a managing director of equity research at the investment firm Wedbush and a longtime Tesla bull, told ABC News. As car sales have slowed, Musk has touted a future autonomous car service, dubbed robotaxis, as a growth area for the business. Last month, Tesla launched a limited version of what it claimed is a self-driving taxi service in Austin, Texas. The rollout marked a milestone for the company's self-driving taxi aspirations, but limitations placed on the vehicles and a series of apparent miscues suggest the technology remains far from wide adoption, some analysts previously told ABC News. Musk has also touted humanoid robots as a future growth area for Tesla. While the product remains in an early phase, Musk expects the company to eventually produce more than a million robots each year, he said on this week's earnings call. Goldstein, of Morningstar, applauded Musk's effort to move Tesla away from the highly competitive auto market toward nascent tech sectors. "Musk's long-term goal is to transition from an automaker to an AI robotics company -- that's still on track and making progress," Goldstein said. "That's where it has greater opportunities to grow a competitive advantage." The ultimate outcome for Tesla's forthcoming products remains unclear but Musk has earned the benefit of the doubt, according to some analysts.
Epoch Times
3 minutes ago
- Epoch Times
Lawmaker Questions Pentagon Over Chinese Engineers Tied to Microsoft Contract
Sen. Tom Cotton (R-Ark.) has requested details from the Pentagon regarding the extent of information shared with Chinese engineers involved in a Microsoft cloud services contract. Cotton, chairman of the Senate Select Committee on Intelligence, sent a letter to Defense Secretary Pete Hegseth dated July 24 requesting findings from an internal two-week review announced by the Pentagon chief on July 18.
Yahoo
14 minutes ago
- Yahoo
China's $733 Billion Warning: Why Investors Can't Ignore This Red Flag
China just posted a record-breaking 5.25 trillion yuan ($733 billion) budget deficit for the first half of the yeara 45% jump from the same period in 2024. Behind that number? A government pulling every fiscal lever it can to keep growth on track as exports to the US take a hit. While American tariffs remain elevatedroughly 30 percentage points higher than a year agoBeijing has doubled down on infrastructure and domestic spending to compensate for weakening external demand and a bruised property sector. Warning! GuruFocus has detected 9 Warning Signs with MSTR. So far, that strategy has bought time. GDP grew 5.3% in the first six months, running ahead of the government's full-year target. But under the surface, cracks are showing. Fiscal revenue fell 0.6% year-on-year, tax collections dropped 1.2%, and land salesa key source of fundingslipped another 6.5%. Meanwhile, total government spending rose 9% to nearly 19 trillion yuan, driven by capital-heavy projects and social support. For investors, that paints a mixed picture: growth is holding up, but the cost is rising fast. All eyes now turn to two events on the horizon: a high-level economic policy meeting in Beijing and fresh trade negotiations between Chinese and US officials. What happens next could shape the outlook not just for China's fiscal stance, but for any company exposed to cross-border flowsparticularly those like Tesla (NASDAQ:TSLA), which depend on both Chinese consumers and manufacturing capacity. If tariffs rise or growth slows, earnings leverage across sectors could swing hard in either direction. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
