New information has been revealed that questions Elon Musk’s leadership instincts.
The Tesla (TSLA) CEO is no stranger to controversial choices that cause both experts and investors to question his ability to lead the company. While the electric vehicle (EV) producer has risen to the top of its field, Musk’s antics have raised plenty of eyebrows.
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Since Musk began his tenure with the so-called Department of Government Efficiency (DOGE), Tesla stock has mostly trended downward, and Wall Street sentiment toward it has also decreased. Even analysts who maintained highly bullish stances on TSLA for years have reduced their price targets.
With competition rising in the EV market, both Tesla and Musk are facing a highly uncertain future as consumers take a stand against the company. Now, a new report suggests that things could be about to get worse for Musk as a poor decision he made comes into focus.
Consumer sentiment toward Tesla has plunged lately, dragging share prices down with them.
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Musk ignored key warnings and Tesla may pay the price
Over the past few years, the EV landscape has shifted rapidly, as competition has intensified. When this happens, industry-leading companies such as Tesla are forced to adapt, which typically means finding new ways to innovate.
Part of Tesla’s growth strategy has focused on self-driving technology, specifically in pioneering its robotaxi. Known as the Cybercab, this autonomous vehicle is expected to be rolled out later this year, though with operations on standby. Experts have claimed that this means it doesn’t qualify as truly “self-driving.”
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This has meant prioritizing the Cybercab at the expense of another new model, specifically the $25,000 Tesla Model 2 that fans had eagerly awaited for years.
It also seems that Musk’s decision to focus on highly priced robotaxis over more affordable daily driver EVs may have been ill-advised.
According to a new report from The Information, internal analysts at Tesla warned Musk that the robotaxi “might never be profitable,” and could negatively impact the company in the long run. These experts noted that Tesla would likely be forced to keep the Cybercab mostly in the U.S., as obtaining regulatory approval in international markets would be challenging.
However, they also noted that the Model 2 would be welcomed in markets such as India, Vietnam, and parts of Latin America, which would embrace a mass-market EV from a popular brand. However, that did not prove enticing enough to sway Tesla’s leader.
“Musk hoped he could sell millions of Cybercabs to individuals and for ride-sharing, but the internal analysis pegged those sales in the hundreds of thousands,” Sherwood News reports. “Meanwhile, Tesla could have actually sold millions of the now defunct Model 2, the report said. Musk shot it down and refused to produce both the low-cost car and the robotaxi.”
This highlights the zero-sum nature of financial markets, in which a company opts to develop one product over another. Now, the Cybercab is facing new challenges, as the trade war with China threatens Tesla’s production plans and forces it to halt component shipments.
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On top of that, China itself is making notable progress on the self-driving front. Industry leader BYD is introducing self-driving technology into more and more cars, shortly after it outsold Tesla yet again by reporting strong delivery statistics for Q1 2025.
History shows that this isn’t unusual for Musk
For years, Tesla enthusiasts wondered when the long-awaited $25,000 model, described as the electric equivalent of the Ford Model T, would be released, finally bringing the luxury EV brand to the mass market.
Early in April 2024, sources confirmed that Tesla would be scrapping its plans to build the Model 2 and would instead be focusing on the robotaxi. At the time, this came across as particularly disappointing, as the current anti-Tesla push had not yet begun.
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Now that investors know that Musk ignored valuable insights from internal analysts regarding the Cybercab’s questionable profitability, his leadership will likely face even more scrutiny. Investors such as Ross Gerber have already called for him to step down, claiming it is in the company’s best interest.
That said, this type of action seems to be on brand for Musk. In his 2021 book Power Play: Tesla, Elon Musk, and the Bet of the Century, author Tim Higgins reported he had fired anyone at Tesla who disagreed with him.
In this case, Musk appears to have cost his company a key opportunity at a time when Tesla desperately needs a growth-driving catalyst. Had he listened to his consumers, TSLA stock might be performing better right now.
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