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At first we hardly noticed anything – how Elon Musk was arguing about the future of Tesla’s electric cars: Some Tesla models were delayed here. Another one there. Beautiful promises of a new (especially) small Tesla model evaporated like a dream at dawn.
Musk’s far-right stance had caused the progressive global middle class – his core audience – to avoid Tesla.
What his role as enfant terrible Many people are surprised that the Trump administration has ended the Tesla brand.
In any case, car sales fell by around 10 percent last year. At the turn of the year, the Chinese BYD had overtaken Tesla as the world’s largest electric car manufacturer, and Volkswagen sold more electric cars in Europe than Tesla.
Oops.
The interesting thing: Musk didn’t seem to care.
The annual report came last week. It showed that cars account for three-quarters of all the company’s sales. Simply put, your cash flow will fund Tesla’s ambitious plans beyond cars.
But at the same time, car sales and profits are falling sharply while the company wants to double its development budget for AI and robots.
In fact, profits more than halved in the fourth quarter.
It doesn’t fit together.
Did I say Musk saws at the same time? The branch he sits on when he retires two of his only five car models, the larger and older Model S sedan and the Model X SUV.
If a normal automaker had come forward with such news, the stock value would have plummeted with such a bang that it would be assumed that something fundamental had been damaged.
Tesla shares rose.
“Are they downright stupid?” one would rightly have asked in my hometown of Västerbotten.
But there are two explanations.
The first: Musk is fundamentally reshaping the company. Full of symbolism, the scrapped car models in Tesla’s factory in Fremont are being replaced by the human-like robot Optimus – which is said to be able to do complex things better than humans. At the same time, stock analysts hope that Musk will dominate the robot taxi market – and that the company’s energy storage will grow.
The second explanation is more grandiose.
Musk has three major companies: Tesla, the AI company X AI and the space company Space X.
Now the three can be merged.
On Tuesday night, Musk just announced that the space company Space-X is merging with his AI company X AI, whose chatbot Grok recently created, among other things, ambiguous images of Swedish Deputy Prime Minister Ebba Busch. This is ahead of Space X’s upcoming listing.
But that’s not all. In the final days of January, Bloomberg reported that Musk was considering marrying Tesla with SpaceX as well
It would make sense to combine all three companies for two reasons. First, that different technologies benefit each other: Tesla just invested $2 billion in X AI. The goal – according to sources at the Bloomberg news agency – is to build an independent AI system that will become the brain of Tesla’s robot Optimus.
The second reason is more blatant. The cash flow at Tesla that finances robots and robot taxis comes from the cars that are now abandoned to their fate. The latest model, the Model Y electric SUV, is still the best-selling car model in the world, but turns seven this year. Even though it has recently been updated, competitors are in a technological race and a price war. This puts enormous pressure on Musk and his grandiose plans with Tesla.
If Tesla enters a new giant company, the cash flow for new AI and robotics solutions could come from elsewhere.
