Comment by harshaw
18 hours ago
I am confused about what Tesla is doing. They have effectively two automobile products now with one failed product (cybertruck). reading various articles about this doesn't make it more clear. Do they not want to be a car company?
The problem with being a car company is that they'd have to compete with China. It's possible, but they'd have to make additional capital investments to keep up. They've just wasted a ton of money on a failed Musk vanity project (Cybertruck) and squandered a ton of goodwill in their home market via the DOGE fiasco. Cash flow is not what it once was, and if they're going to make a big capital investment, they're probably right in looking at robots. But that strategy puts them back where they were 20 years ago, just getting started in EVs, and their cash flow will depend on cars for many years to come.
If the problem with being a car company is that they'd have to compete with China, then I have some bad news about being a robot company. China is already farther ahead in both technology and volume of humanoid robots.[0][1][2][3]
[0] https://www.cnbc.com/2026/01/28/cnbc-china-connection-newsle...
[1]https://www.unitree.com/g1
[2] https://interestingengineering.com/ai-robotics/limx-humanoid...
[3] https://www.bgr.com/2083491/china-agibot-humanoid-robot-us-c...
If you think of Musk companies as vehicles to extract money from state and federal governments, then everything falls into focus. Carbon credits, government launches and the Quixotic quest for Mars, and soon Tesla robots sold to the DoD and DHS. I'm only half-joking.
Fair point. It's hard to support Tesla's valuation as a car company, it may be even harder to support as a robot company. You have to wonder what might have been if they'd spent that Cybertruck money on battery research.
Is there anything China isn't far ahead in? Maybe capitalism was a failure.
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It doesn't help that Musk supported a guy who turned around and gutted the incentives that were helping Tesla turn a profit.
It seems counterintuitive, but this helped Tesla which is why Musk championed it. Basically when that tax credit came out, a bunch of Tesla owners had their cars underwater - loans were more than new cars were selling for and depreciation thru the roof. Plus the tax credit helped their competitors. Now that the credit is gone, Tesla owners are closer to being in the black on their cars and it also caused Ford and GM to cut EV production by I believe 100%. Win win for Tesla.
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Right now they struggle to compete with European car manufacturers, there is no way they can compete with China.
The problem with being a car company is that they'd have to compete with China.
As if China cannot produce kick ass robots ? What special sauce does Musk have here that a country with a massive pool of highly trained and educated engineers and decades of manufacturing expertise don't have?
I would bet that as soon as someone "solves" robots. China will relatively shortly, that is months or few years produce something that surpasses them. They have all the pieces and all the capabilities. Just look at drones for example. It just requires correct solution and China might even be first to provided that.
I'm sure China can. But nobody is producing consumer humanoid robots at any scale yet, so Tesla can at least make the argument that they'll make better robots when people actually start buying robots. People are buying cars at scale right now, and existing Tesla models have fallen behind their Chinese competitors.
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Tesla "competed" by corruptly getting BYD banned from the US and hurting US consumers.
Looks like they took Peter Thiel’s animosity towards competition too literally by blocking BYD from the US market. Without competition, they had no incentive to innovate since they were selling into the wealthiest market in the world for their product, the US.
No innovation made them stagnate. Being blocked from the US made BYD innovate.
He generated a lot of goodwill with "that DOGE fiasco", too. It just depends on where you fall politically.
Elon generated goodwill with DOGE among a group of people. He then alienated them during a public spat with the president. This is also a president who has decided to make EVs synonymous with the opposition political party.
Which is interesting because it seems DOGE failed to do anything useful. Patrick Boyle’s video suggested it actually cost $100B.
Which would be par the course for Ketamine Elon
The people he generated goodwill with don't buy a lot of EVs, apparently.
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Elon's a strange hero for MAGA. All the hardcore rural MAGAs I know hate Elon. They consider him a rich dickhead nerd (and group him with Gates) and they hate EVs with a passion, since they are quiet and produce no black smoke.
Automotive stocks are subject to the rules of gravity, aka "boring", while tech stocks are not. Automakers operate on low margins and high volume, and must compete on price, reliability or luxury brand status. Most automakers have multiple brands to sell to all market segments.
Tesla's value proposition was that it was going to be an iPod in a world of identikit MP3 players, and charge a premium for it. One brand to rule them all, no pesky dealerships, with futuristic EV tech and a touchscreen dash that made gas-powered, tactile button-laden cars obsolete.
That was twenty years ago. Tesla went from leading the pack to struggling to achieve scale, with its limelight-seeking leader increasingly holding it back. The leader wants headlines for pioneering "cool shit" and pushing hype to pump the stock price. Buyers on the other hand want affordable and timely repairs (impossible with their resistance to third party body shops and unit cost of replacement parts). As a mature company, it is completely un-equipped to compete with the incumbents whose leaders, not by coincidence, are all largely unknown to the public.
> Tesla's far more popular models are the 3 and Y, which accounted for 97% of the company's 1.59 million deliveries last year. The Model 3 now starts at about $37,000, and the Model Y is around $40,000. Tesla debuted more affordable versions of the vehicles late last year.
I’m confused as to what’s not clear from the article for you?
Agreed. I also thought it was a very dumb move until I saw that. That said, 3% but it costs 2.5x as much, maybe people option them higher idk, that could be a 10% revenue hit. But maybe that's worth it for them
If they just canceled the S and X I don’t think people would be making quite as much fun.
Saying they’re dropping two products that aren’t profitable so they can make a new product that most people seem to think is a complete joke is the problem.
Apparently Tesla dropped 4680 battery production for the CT by 99%, so the CT isn't long for this world either.
But that's okay! They have the Cybercab that will 100% drive itself For Real This Time, $99/mo Autopilot/FSD subscriptions and robots that will theoretically wash your dishes in an age where most people have an adversarial relationship with anything AI, so.
I'm not disagreeing with your overall take, but Tesla and other EV manufacturers have released the same model of vehicle with different battery technologies at different times. Only saying that dropping 4680 production isn't conclusive proof itself.
It's the 4680 cell that is only used by CT at the moment: https://www.autoevolution.com/news/tesla-cybertruck-on-its-w...
How do you suppose Cybertruck is a failure? I see just as many of them as Rivians, while releasing over 5 years later.
They built production capacity for 125,000-250,000 units per year. They are selling around 20,000 units per year.
It was supposed to cost $39k at the low end and have 500 miles of range at the high end. This drove the hype and high reservation numbers.
In reality it costs $79k and offers up to 325 miles of range. Doubling the price is going to significantly limit the reach of the product.
It was estimated at >200k/year, but in reality is well under 50k/year. I'd say that is a failure compared to their guidance.
They are so proud of the Cybertruck sales that they don't eevn dare to disclose sales figures. That's the sign of a market success.
Ignoring who makes it, this kind of gimmickmobile usually sells well for about a year, and then everyone who wants one has one. It was never going to be a tentpole.
Rivian is not making money on those trucks either... I wouldn't count that as a win.
I regularly see Rivians. I've never once seen a Cybertruck in real life. (Midwest USA)
The meme stock run up made Tesla more valuable than the rest of the auto industry combined. They HAVE to find something bigger.
I don’t think they have. Humanoid robots are a bad joke. But that’s why they are pivoting.
Humanoid robots make sense in only one context I can think of, and I definitely wouldn't put it past Musk to enter that market. It will be a big one. He may just be waiting for material science to catch up with his product vision. Much like Steve Jobs waited by the river until capacitive multitouch came floating by, and then pounced on it.
Meantime, as others have pointed out, the Model S and X are not selling enough to justify keeping the factory running. I don't see them going into Optimus production immediately, since as you suggest it's a solution looking for a problem.
If you’re beating around the same bush, I think the material science is already there. It’s more the power draw and the societal blowback that are issues. It is an underrated market, but not a >1T$ market (I hope).
The X and S were always very low volume niche products unlike the much more mainstream Y and 3. I wouldn’t read much into it.
I would. Someone in the market for a presumably profitable BMW 5 or 7 series isn't going to stay with BMW and drive a 3 series.
Yearly sales of model X have been comparable to the 5 series, at least until last year when musk's political activities took the shine off the brand.
High end cars are more profitable. There are millions of 3 and Y owners with positive experiences who would stay with the brand if it had something to move up to.
My 23 MX is the best car I've ever owned. I wouldn't buy the current iterations of 3 and Y.
Most refresh X owners think it's pretty great (not perfect). There are no alternatives at the moment, mostly because other manufacturers are terrible at software development...and that's not good for software defined vehicles.
It's sad to see Tesla walk away from the luxury segment so they can focus on robots, go karts, and robots pretending to drive go karts.
S you can understand, because sedans are dead. But every other US auto company is making big profits with large SUVs, so I don't get dropping X.
Agree with other posters who say whatever you think of Musk, Tesla styling has gotten very stale.
Tesla have always said the design of the X was a mistake of over-engineering. I'm guessing there was no money to be made from it, especially as the sales dwindled.
The two flagship as best selling cars in the world. S and X were low volume cars to get started.
Check out videos of Chinese car company factories. They are far more automated and futuristic than Tesla’s. Most of the new ones have almost no humans in them at all. They have great supply chains and partners for everything that is an input into these factories, and they’re often just up the street from the car factories. The costs are rock bottom and the competition between car companies in China is absolutely bananas.
They are almost exclusively focused on autonomous cars, humanoid robots, and energy (batteries now, maybe more solar manufacturing later).
As much as I dislike it, I can't disagree with the business case here. They already have >300k monthly subscribers at about $100/month. That business will grow rapidly from here as well as the robotaxi business itself.
Within 2 years, this business will look radically different just because of these two changes.
Lol keep dreaming. Those 300k monthly subscribers could churn. Robotaxi isn't two years away. Not even close.
About a decade ago, Musk said he wanted to kickstart the electric car industry, make electric cars cool by showing they can be high performance and promising not to enforce Tesla's patents against competitors. Remember how electric cars used to be perceived? The Simpsons put it as "people will think you're gay". I'd say he completely succeeded in that goal and the whole "make piles of money for investors" is just because investors decided to try doing that.
Tesla and musk were living off of monstrous subsidies to the tune of 20B or more
Sure. And selling the most popular car on the planet is a failure?
Didn't the US government put ~$80b into rescuing GM etc, years ago?
Subsidies bootstrapped the EV industry. Stupid policies mean walking away from the investment, ceding the market to foreign competitors, and doubling down on legacy ICE crap the rest of the world no longer wants...and Americans will be less and less able to afford.
>the most popular car on the planet
That's the Toyota Corolla. I find this inaccurate glazing of musk to be relatively common but it always strikes me as profoundly weird.
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EVs are becoming commoditized. Tesla doesn’t have the scale ( or experience ) to play that angle.
literally what are the gigafactories for then?
At the moment most of them are running notably below capacity.
Tesla's growth plan originally had them doing factory expansions and new factory in Mexico by now, but instead they have pivoted to trying to keep utilization of their existing lines up by introducing cheaper trims of existing vehicles.
Batteries - lots of uses beyond EVs, but lots of EVs are making use of the batteries they can produce, as well.
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Regular car factories with a fancy name.
it's very difficult to have a conversation about this, because it would appear that sincere answers to your question will get downvoted. one POV is that, if you accept the bear case from Internet commenters that these guys are incompetent or stupid - blah blah blah, Cybetruck - the existence of their autonomous taxi product is extremely bullish. they managed to pull off something similar to Waymo despite being so much worse at it, yes? I'm not sure they will even need a diverse product line of premium cars, if they can sell an autonomous 3 for the price of a small house. on the flip side, the bear case there is, if they could figure it out, so will a lot of other car companies. and yet, Cruise ceased operations, and Tesla will seemingly pay a manageable amount of blood money for Autopilot and move on.
nobody really can predict the future, so unsurprisingly, "reading various articles about this doesn't make it more clear." but people on the Internet keep getting worked up about it. to me, people do not comprehend the meaning of "high risk, high reward."
Their autonomous taxi program is a joke right now, especially compared to Waymo. Way fewer cities/rides, and they haven't even deployed their cybertaxi thing.
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When Tesla started producing cars, everyone wanted what they proposed. Now, no one wants the cybertruck. No one is really asking for humanoid robots. Their self driving is vastly inferior to waymo when it comes to taxies, I can't see them winning that market. Their batteries and solar panels, like their cars, seem to be more or less abandoned.
So, it's pretty easy to see why people are confused and upset. Tesla is discontinuing all the things people like about Tesla, and selling vapourware that no one really wants anyways, instead. It's also not "a difficult conversation."
What seems more likely is that Musk, in his extreme shift to the right, has abandoned the original goal of Tesla: producing sustainable electric vehicles. He's become more and more delusional, with failing like the Boring machine and the Cybertruck starting to pile up. He's alienated his existing customer base by both getting into politics and dropping any pretext of trying to help the environment.
From my point of view, Tesla is a failed company with a leader who has gone off the rails, and a board that refuses to reign him in. Revenues are falling off a cliff outside of US governmental money, and it's betting the whole ship on only two ideas: self driving, which is so far no where close to being where it needs to be, despite the progress, and on yet another fairy tale that is humanoid robots.
The board cannot rein him in because doing so risks having the stock valued as a car company stock and not as a tech company or meme stock. I think they can only fix this after the stock has crashed.
imo their competition for autonomous vehicles doesn’t come from car companies, but from tech companies.
Amazon has a lucrative incentive to automate its supply chain up to and including last mile delivery. Waymo has proven out the tech and could easily partner with Uber or Lyft for the rider experience and reach.
If you’re FedEx, for example, would you rather buy from Amazon or from Tesla? Who is more likely to be a sane and trustworthy partner?
I don't think that Uber or Lyft are going to invest in self-driving taxis. The capital model is completely different: Uber and Lyft are by design capital light, they own nothing more than the software (1), and someone needs to buy all of these self-driving machines and then someone needs to maintain them, whereas their current model doesn't do that- they can't offer that to any tech partner.
The reason that you don't see more Waymo areas has nothing to do with rider pool or experience, it is because their tech requires pre-mapping everything with LiDAR several times- the advantage is that if you know what is static (because it was in all of that LiDAR mapping) then a simple difference algo can tell you everything that is dynamic in the environment. (Also, they are just starting to hit cities with significant precipitation- SFO, LA, ATX, PHX are all pretty dry cities, they are going into ATL, MIA, DC, DEN, etc.)
1: With a lot of suspicion that much of their profit comes from drivers not understanding depreciation of their vehicles, something that the accountants who work for Uber and Lyft will understand very very well.
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> they managed to pull off something similar to Waymo despite being so much worse at it, yes?
similar?! what exactly is your definition of similar? tesla and waymo are so far apart that it is difficult to accept any argument that tries to make this comparison. they cannot co-exist in the same sentence unless to explain one’s success against the other’s failures
Can you elaborate for those less familiar with the successes vs failures?
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Just a reminder that Tesla has still not offered driverless robotaxi rides to the public.
At this point, it's entirely because Musk refuses to add LIDAR. If he did they could probably be competing with Waymo in a year.
His rationale seems to be validated by Nvidia following the same strategy, no?
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You should probably keep reading.
Elon for years has said Tesla is not a car company. He’s also said the “factory is the product.” Tesla also has energy divisions and investments, as well as xAI investments now.
Logically given that Model S and X are something like less than 5% of deliveries (and have been for years), if they’re right about Optimus, that capacity will generate far greater revenue.
Do they have enough people to remotely operate that many Optimuses?
They can probably hire enough random dudes in India, especially if AI reduces the need for call center employees.
It will be slightly creepy when the Optimus walks into the bedroom and stares while its owner is ... in the middle of something, but that's a small price to pay.
Plus the Tesla employees in the U.S. will also be able to share the video, so it's a win-win.
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> if they’re right about Optimus, that capacity will generate far greater revenue.
How many Cyber Trucks were they supposed to sell?
Yeah. And that was a car. A thing that is at least a category people buy.
Optimus is complete vapourware. The quoted 1M units a year would be utterly unbelievable from any company, let alone Tesla with their history of over-promising.
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Its not that strange; normally manufactures are focused on volume and brand. So you have the 3 and Y in numbers where they can compete in the mass market price range; and CT and FSD for brand notoriety.
S and Y are not special enough to do anything for the brand, they dont qualify as halo products anymore. Probably still wouldnt be that interesting even if refreshed.
CT is still interesting, it looks different and has some tech inside that seems worthwhile to iterate on.
And unlike traditional brands, tesla has FSD, Optimus, and Musk to do enough to keep the brand itself healthy.
My guess would be they are deciding what they can learn by iterating the CT, and might decide to drop it in a year or two when the roadster takes the halo role.
They will keep trying to improve on volume for 3 and Y.