Tesla’s Decline Strengthens Musk’s Visionary Image
Elon Musk’s bold ambitions for Tesla are beginning to look more forward-thinking than ever, even as the electric vehicle (EV) pioneer’s market dominance fades. While Tesla’s recent struggles have highlighted the limits of its automotive business, they have also reinforced Musk’s reputation as a futurist, steering the company toward artificial intelligence, robotics and energy systems that may define its next chapter.
Tesla’s Waning Lead in Electric Vehicles
Just a few years ago, Tesla held an unchallenged position in the EV market, accounting for nearly all global profits from battery-powered vehicles. That monopoly has since disappeared. In 2025, Tesla delivered around 1.6 million vehicles, nearly 10% fewer than the previous year. Chinese rival BYD surpassed it by selling more than 2 million fully electric cars, marking a decisive shift in industry leadership.
The contrast with Apple is striking. When Tim Cook’s company lost its lead in smartphone shipments, it remained highly profitable, securing roughly 43% of global handset revenue. Tesla, by comparison, has seen its automotive revenue fall an estimated 16% below its peak, according to Visible Alpha data. Its gross margins have halved since 2022, and with EV subsidies declining worldwide, the company’s operating profitability now looks ordinary beside traditional automakers.
Shifting Strategies and Expanding Horizons
Some of these changes were beyond Musk’s control, including new trade and regulatory realities following Donald Trump’s return to the White House. Yet Tesla’s once-exclusive manufacturing advantages—such as its giant die-casting techniques and proprietary charging systems—have spread across the industry, eroding its competitive edge.
Rather than focusing on lower-cost vehicles, Musk has turned his attention to machine learning, autonomous driving and humanoid robots like Optimus. This shift signals both a retreat from Tesla’s core car business and an embrace of higher-risk, higher-reward technologies. Tesla’s self-driving system, relying solely on cameras rather than lidar sensors, depends heavily on advanced AI capabilities. If successful, it could redefine the concept of a car altogether.
Beyond Cars: Building a Broader Energy Empire
Tesla’s growing battery output now feeds into energy storage and grid solutions, making this its most profitable division. With the global expansion of data centres and renewable infrastructure, demand for Tesla’s energy products continues to rise. These developments suggest Musk is building the foundations of a diversified technological powerhouse rather than a simple automaker.
Investors appear to share that belief. Tesla’s shares trade at an extraordinary 376 times projected 2025 earnings, reflecting strong faith in Musk’s long-term vision. While his unconventional style often defies corporate orthodoxy, what once seemed like the eccentricity of a maverick is increasingly viewed as the calculated experimentation of a visionary.
with inputs from Reuters