During an all-hands meeting on Thursday night, Elon Musk, the CEO of Tesla Inc. (NASDAQ: TSLA), gave a rallying speech to staff members, encouraging them to “hang on to” their stock in spite of the company’s recent difficulties. The speech was given in the wake of Tesla’s stock falling 51% since December due to declining sales, political disputes, and growing regulatory obstacles.
Political backlash and stock decline
Due to Musk’s increasing power in the White House and his backing of divisive political forces, such as Germany’s far-right AfD party, Tesla has experienced escalating political criticism.
- Vandalism has targeted the company’s automobiles and dealerships in both Europe and the United States.
Due to Musk’s vocal activism, protesters have allegedly destroyed Tesla charging infrastructure and showrooms. - The Danish pension fund AkademikerPension is now thinking about adding Tesla to its list of exclusions, citing Musk’s political affiliations, Tesla’s labor policies, and issues with board independence.
According to Amazon, sales of stickers that read, “I bought this before Elon went crazy,” have increased.
Regulatory Review and Safety Recalls
- To make matters worse, Tesla recalled 46,000 Cybertrucks in the US because of a defective external panel that may separate while the vehicle was being driven.
- Several regulatory investigations into Musk’s assertions on the capabilities of Tesla’s driver-assistance technologies are also underway.
- Consumer confidence in Tesla’s autonomous technology could be further damaged by these inquiries.
Musk’s Vision for the Future: AI, Autonomy, and Robotics Despite the challenges
- Musk remained upbeat about the company’s future, doubling down on its push into AI and autonomous driving. He said during the meeting that Tesla would obtain global regulatory approval for fully autonomous vehicles within five years, saying, “I think in five years, we’ll probably have regulatory approval globally, so you’ll have autonomous Teslas on every continent.” Musk also reaffirmed his audacious prediction that Tesla’s shift to AI and robotics could increase the company’s valuation to $5 trillion.
- Wall Street Reacts: Tesla Shares Rise 2% Friday After Musk’s comments, Tesla shares increased 2% Friday, bringing the company’s market capitalization to about $760 billion.
- However, noting deteriorating public opinion against the brand, JPMorgan recently lowered its end-of-year price prediction for Tesla stock from $135 to $120 per share.
- According to JPMorgan analysts, “the CEO Elon Musk’s position as a senior adviser to the President coincides with the heightened change in sentiment towards the Tesla brand.”
Missed Goals on Autonomy Several Times
- Despite being ambitious, Musk’s self-driving claims have frequently fallen short of important goals:
- Musk never fulfilled his 2017 promise to finish a coast-to-coast autonomous trip from Los Angeles to New York by the end of the year.
- He predicted in 2019 that Tesla would have one million robotaxis on the road by the next year, but that never happened.
- Even while Musk has maintained that FSD is just a software update away from being a reality, these frequent delays have increased doubt about Tesla’s autonomous aspirations.
Conclusion: Tesla’s Path Ahead Will Be Tough
- Tesla’s brazen optimism is intended to boost employee morale and restore investor confidence as the company struggles with declining sales, political backlash, and growing recalls.
- Even though Tesla may still have AI-driven opportunities in the future, the business must deal with mounting regulatory demands, harm to its reputation, and waning customer confidence.
- It remains to be seen if Musk’s $5 trillion AI powerhouse vision materializes or if it fails due to failed goals and market forces.