Debunking Elon Musk – Part 22
Tesla is Dying(Part 2 of 3)
A Tesla Supercharger station in Petaluma, California. Source
Contents
Tesla is Dying
Appendix on Data Collection
Why is Tesla Dying?
– The Unexplained Surrender
– The “Greenfield” Founder Who Lost Heart
– Elon Musk, the “Visionary”
– Competition With a Flawed Product
– Management and Culture: Core Problems
– The Inevitable Conclusion: The House of Cards
– Selling Tesla cars
– The End Times
Tesla is Dying
Sales numbers have fallen off a cliff in key markets around the world. [1][2][3]Tesla’s performance is down in almost every single European market. Even sales in China, one of the company’s most lucrative markets, are dropping sharply. Yet overall worldwide sales seem to show a yearly decline of only about 10% because the true picture of Tesla’s decline as an auto manufacturer is obfuscated by a number of factors. Tesla’s sales exhibit a steady, competitive decline from a weakening brand position, as in Europe, combined with volatile negative bursts from policy changes, as with the sudden 90% drop in Quebec, Canada.
Comparison: EV Auto Sales (millions)
2023 2024 2025
Tesla only 1.8 1.7 1.6
BYD only 3.0 4.3 4.6
All EV brands Worldwide 13.7 17.5 20.0
Automakers typically consider “sales” as total autos pushed to the dealers, while we want to know actual retail purchases by consumers. This is not the same thing, and sometimes very much not the same thing. I will give you one example of this from China, for August of 2021. I cherry-picked this one because it was the most dramatic example. Tesla claimed 44,000 China sales, but 31,000 of those sales were actually exports, leaving about 13,000 for domestic sales. But the Government office showed only 2,800 actual registrations for August. Tesla immediately screamed “That’s not true” (the government is lying). It is true that registrations will lag sales by a few days, but these variations are usually minor. The most likely answer is that Tesla counted the 13,000 cars as “sold” when shipped to the showrooms, while only 2,800 were actually purchased.
Tesla’s worldwide auto sales for 2023, 2024 and 2025, were roughly 1.8 million, 1,7 million, and 1.6 million. However, these figures mask the true picture. For one thing, Tesla had been showing annual growth of as much as 40% in the years immediately prior, which suddenly turned to a 10% overall decline, in reality a massive change. To emphasise this point, less than a year ago (in 2024), Elon Musk was proudly proclaiming that Tesla would be selling 20 million EVs annually. Yet only one year later, Tesla may be lucky to sell even one million cars. It is also important to note that Tesla’s rapid sales growth occurred during a period when there was little or no competition; the emergence of competitors and the comparison to other choices has hurt Tesla badly. In general terms, Tesla is now seen as highly over-priced, and not at all “premium” or “luxury” as advertised. Even worse, with the appearance of the multitude of choices in the market (primarily Chinese) Tesla is not seen as competitive on design or style, on features, on range, on autonomous driving, on IT and AI integration, and other factors.
There is a great deal of scattered information about the collapse in Tesla auto sales, but confusing because often referring to specific months. For example, in news articles in March of 2025, we have the following: Tesla sales in Germany plunged by 60% in January, 2025 and 76% in February, followed by a massive 76% in March; Australia posted a 72% decline, and Tesla’s February sales in China fell 50%. Tesla sales in Norway collapsed by 44% through January and February, despite the country’s overall EV market growing by 53%. [4][5][6][7][8] Then we have Reuters: Tesla’s new car sales in Spain fell 36% in April; Tesla sales in Spain plunged by 37%, even as sales of fully electric vehicles rose 28% on the continent. Sweden’s Tesla sales dropped 81%. A new report published by Schmidt Automotive shows that Tesla’s market share in western Europe fell by half over 12 months. [9]
Another report: Tesla’s sales have dropped sharply across the European Union and the UK. In Germany — the only European country with a Tesla plant — sales of the new EVs plummeted by nearly 60%, while France saw a 63% decrease compared to January 2024. In Norway, new Tesla registrations fell by 38%. Sweden, meanwhile, registered a 44% plunge. Sales in the United States are also falling, though less drastically. That’s not to mention the spectacular collapse of Cybertruck sales — currently only available in the US and Canada — which fell by 22% from Q3 2024 to Q4 as the controversial truck’s resale value crashed. [10]
In Europe, where BYD is making inroads and building two manufacturing plants, Tesla is struggling with slumping sales. In February, 2025, Tesla’s sales there plunged around 40% from the same month in 2024, according to the European Automobile Manufacturers’ Association. [11] In April 2025, BYD surpassed Tesla in EV registrations in the European market. BYD’s registrations rose by 169% year-on-year, while Tesla’s fell by 49%. [12] In May, 2025, BYD new car registrations soared 359% in Europe while Tesla reported a 49% decline, and this despite the EU tariffs on Chinese vehicles. [13]
China was similar. Data from the Passenger Association showed that Tesla’s sales in China in February, 2025 were a year-on-year decrease of 49% and a month-on-month decrease of 51%. [14] I didn’t look for registrations by week, but this one caught my eye. China EV registrations in week 16, 2025: Tesla 6,800, Xiaomi 7,200, BYD 56,300. [15] In the first two months of 2025 in China, BYD’s sales surged by 25%, with a market share of 27%, while Tesla’s sales tumbled 14% and market share plunged to only 2%. Two other reports provide detail about Tesla’s catastrophic performance in China, including the shocking 64% month-over-month collapse in October 2025. [16][17]
The key finding is clear from all the search results: Tesla is facing simultaneous, severe declines in all major markets, with the collapse being most dramatic in European countries like Sweden and Germany, followed by sharp declines in China and the US. The worst-performing year-over-year markets were Sweden (-86%, July 2025); UK (-60%, July 2025); Germany (-55%, July 2025); EU overall (-34.2%, Nov, 2025), China (-63.6%, Oct, 2025); overall US (-23%, Nov, 2025).
The primary shock for the US was the elimination of the $7,500 federal EV tax credit in September 2025. There was a brief surge when some consumers made purchases prior to the expiration, but then a sharp drop in demand that Tesla’s subsequent price cuts could not fully offset.
In the quoted sales figures below, I have rounded off the numbers for ease of reading, and thus the percentages are not precise. However, the rounding errors are not significant, and it is the magnitude of the numbers that is worthy of attention.
Tesla’s Q1 2025 deliveries in each European country compared to Q1 2024: Source.
Country Q1 2024 Q1 2025 Change
Germany 13,000 5,000 -65%
UK 12,000 12,000 6%
France 11,000 6,500 -40%
Belgium 7,000 3,000 -60%
Holland 7,000 3,500 -50%
Norway 5,000 3,500 -25%
Other 4,000 3,000 -25%
Sweden 4,000 2,000 -60%
Italy 4,000 3,500 -10%
Spain 3,500 3,000 -12%
Denmark 3,500 1,500 -60%
Switz. 3,000 1,000 -60%
Portugal 3,000 2,000 -25%
Austria 2,500 1,500 -50%
Poland 1,500 1,000 -30%
Finland 1,000 500 -50%
France also saw a significant 40% decline in sales.
If this isn’t enough evidence for you, here are some headlines:
Tesla sales plunge: Biggest decline in history: CNN
Tesla Sales Are Tanking Across The World: Inside EVs
Tesla Sales Fall Off A Cliff Globally, – Germany, Australia, and China: Carscoops
Dark Clouds Gather Over Tesla as Sales Plummet Worldwide: Futurism
Tesla registrations — and public opinion — are in a free fall: The Verge
Tesla sales are down in every single European country except the UK: Electrek
Tesla continues to “hemorrhage” losses in Europe: The Driven
Tesla Sales Decline in California With Model 3 Plunging 36%: Bloomberg
Appendix
Data Collection Methodology, and Why the Collapse is Worse Than It Looks
There almost seems to be a conspiracy against auto research in that nobody gathers and collates data in precisely the same way because none have precisely the same interests. There are also differences in methodology by country or region. Poland does not do what Japan does, and Brazil differs from both. Moreover, there are many variables, and each source (manufacturers, media, government agencies, research firms) chooses those it considers important or preferable (or politically beneficial). Some sources combine hybrid-electric autos with pure EVs, while others don’t.
When examining Tesla in any market, we need to know the percentage change in the market itself, Tesla’s percentage declines, and the experience of other brands in the same time period. We also need to know other factors that influenced the market. As one example, Tesla sales increased in the US in the fall of 2025, in advance of the cancellation of government rebates. Other factors are the initiation of price cuts, generous financing provisions and so on. This information materially affects the conclusions we should draw from the raw numbers. Using China in 2025 as an example, Tesla sales plunged sharply in spite of price cuts of as much as $20,000 per car and 5-year (or 7-year) no-interest financing, in a booming EV market with all other brands showing marked increases.
The time period and ending dates are important. The results for a 12-month period can look very different for the period Jan. 1 to Dec. 31, and June 30 to the next July 1. Equally, the first 6 months of a year can look dismal compared to the second half of the same year. The many sources listed above, are well aware of this, and use it to advantage.
There is yet another factor that serves exceptionally well to mask the true overall picture, this being fluctuations in individual markets. For example, Tesla’s sales in Canada plunged to ~zero, but sales rose in the US ahead of the government rebates being canceled. The net result was that Tesla sales appeared stable when in fact they totally died in one country and showed only a temporary blip of life in the other. As well, the size of the base market matters when examining percentages; a 50% drop in Liechtenstein sales is insignificant, but not so in large markets.
Note that the available data covers specific months/quarters reported as low points, not a complete monthly series for all years. To source the complete regional sales datasets necessary for a complete analysis, would be a huge and daunting research task due to all the variables, and quite unnecessary for our purposes.
Why is Tesla Dying?
The official narrative lists three main reasons for the collapse in Tesla’s auto sales: (1) A stale model lineup with no new models or improvements for five years; (2) Fierce competition, primarily from BYD and other Chinese auto brands; and (3) Elon Musk’s political activities alienating much of the customer base in the US, Europe, and China. These three are all valid and did indeed have a major effect on Tesla’s fortunes. There are also many equally practical reasons for customers to turn away from Tesla, including overpriced models, poor resale value, poor overall quality, low driving range, FSD malfunctions, and much else. But in a real sense, these “standard” (albeit logical and real) reasons are symptoms, not the cause.
The Unexplained Surrender
The robot – teased on 2021 event by a person in a spandex costume – was the star for the tech giant, as Musk claimed it would ‘be a fundamental transformation for civilization as we know it’. Source
Observant readers (or observant observers) should have observed a paradox, something about Tesla that doesn’t make logical sense: Tesla’s sales are falling in all markets. Tesla is collapsing in plain sight, yet its leader is not fighting the car war but abandoning it. Elon Musk has taken responsibility for worldwide sales, but has done nothing except cut prices. Tesla has not launched a new passenger vehicle since the Model Y in 2020, and no new models are proposed. Musk killed the production of the new less expensive Model 2, and has terminated the Model S and Model X. There is no word of any positive development in the auto sector. In the absence of product refreshes, Tesla’s primary tool (and only sales lever) to move metal has been aggressive price cutting, which erodes profit margins and brand value, and will serve only to complete Tesla’s “surrender”. Price cuts also lower resale values, costing millions of former customers billions of dollars. Everywhere we look we see the signs of a neglected car business, a stagnant lineup and a canceled future.
There is no evidence that Musk is making any attempt to “win the EV race”, none. He seems to be simply maintaining what he has now, watching its decline, and simply pushing the staff harder to make sales that will be increasingly difficult to make. This is abandonment, an acceptance that Tesla no longer has desirable products, and no motivation to create any. Tesla’s recent financial data show not only plunging sales but declining gross margins and profits, and a significant workforce reduction. These concrete facts support the observation that Tesla is in a maintenance mode. When your sales are plunging and profits plummeting, killing new models and cutting the workforce by 20%, are not the acts of a company preparing for growth. The decision to stop production of the Model S and Model X—the vehicles that defined Tesla’s premium brand—is the clearest signal that Tesla is abandoning the car wars.
The high-pressure, “burn-and-churn” sales approach and the discontinuation of flagship models are not just symptoms of trouble; they are the deliberate actions of a company that has given up on the car market. Weaving all these threads together, turns a story of decline into a story of a deliberate, high-risk strategic abandonment. There is of course intense external competition (BYD, Xiaomi) offering more attractive cars and better value, but it is the “internal” factors that stand out.
This abandonment thesis is not theoretical. If we look at all the facts, it is clear that Tesla’s car business is undergoing an active de-prioritisation, with the core car business now framed as the funding source for the new AI future. Musk is diverting resources from the “sinking ship” (cars) to the “life rafts” (AI/robotics). Tesla is already converting factories from cars to Optimus robots – despite having no robot to manufacture. Moreover, Tesla’s manufacturing process is being re-worked for the Robotaxi, not for a new passenger car. Capital, engineering talent, and executive attention are being systematically redirected from the automotive division to the AI/robotics projects. Tesla’s cash is not building next-generation EV platforms but is being diverted to Optimus and Robotaxi. All auto investment has been canceled and a massive $20 billion of Tesla’s cash reserves are being diverted to AI/robotics projects.
There have been major staff movements internally in Tesla from auto to AI, but in addition Musk’s (privately-owned) xAI has drained nearly 100 of Tesla’s top AI staff. Musk’s public communications and Tesla’s investor messaging are now overwhelmingly dominated by Full Self-Driving (FSD), the “Cybercab”, Robotaxi, and the Optimus robot. These actions make sense only if Musk has fundamentally given up on the automotive battle. The fact that Tesla has been rhetorically repositioned from a car company and officially redefined itself as a “physical world AI company” is a profound narrative shift, but it creates a self-fulfilling prophecy of automotive decline.
The evidence strongly supports the assertion that Musk is abandoning the competitive EV battlefield and is making a massive, all-or-nothing bet on AI and robotics. This thesis perfectly fits all the observable facts of Tesla’s current trajectory and explains the cause of Tesla’s “transformation” from a car company to an AI company.
But we don’t want to put the cart before the horse, and that means explicitly framing Tesla’s current sales tactics and the deliberate neglect of the auto business as a direct consequence of this redefinition. In fact, it was the pivot to AI/robotics that was the root cause of Tesla abandoning its core auto business. Now the central question: “Why would Elon Musk surrender his most famous company?” The answer is that there is another factor beyond this, one more fundamental than all the others, that is buried under the smoke of the obvious.
The “Greenfield” Founder Who Lost Heart
In 2019, Elon Musk had a 2027 deadline to surround Earth with 12,000 high-speed Starlink internet satellites. Source
There was a media article recently claiming that Musk had lost interest in Tesla, and that would seem true. Musk should certainly be updating the cars, producing the new model, and making other efforts, but Tesla is instead being abandoned to its fate. But Musk has not so much “lost interest” in Tesla as he has “lost heart”. By that, I mean he no longer sees a huge upside but only the possibility of preventing a downside. And that is a very different emotional state. If we are starting Tesla, and can imagine sales of millions of cars in the near future, that is a huge motivation because at the end you have something enormous. But if Tesla is already established and going downhill, it would require the same amount of effort just to stop the slide. And even if you are successful, at the end you have nothing except what you began with. No gain, just no loss. I don’t believe Elon Musk has the emotional makeup to “save” Tesla. This is why he has suddenly re-defined Tesla and shifted all his attention to Optimus and the Robotaxi.
Musk’s history shows he is driven by the challenge of creating something new and transformative (Mars, SpaceX, the initial Tesla vision). The grueling work of refreshing models, improving fit-and-finish, and battling for market share in a commoditised EV market offers none of the visionary thrill of launching a humanoid robot or a spaceship to Mars. Thus, the “abandonment” of Tesla’s car business is a kind of calculated sacrifice. Tesla’s automotive decline may not be a failure of management in Musk’s eyes, but a managed trade-off. The “heart” has moved to where Musk perceives the next revolutionary upside to be. The car company is seen as the established, if declining, engine that must fund that new dream, even if it means being “abandoned to its fate” in the competitive auto market. This is the compelling point: The future of Tesla is no longer about winning the EV race, but about successfully executing a high-risk pivot before the cash cow runs dry.
This assessment may seem excessively negative but it perfectly coincides with reality. And the reality seems to be that Elon Musk hasn’t the heart to battle head-on with equals or superiors, that he was ambitious only when there was “the visionary thrill” of unlimited success without competition. Fighting when you are down requires a very different kind of person. The Canadian poet Robert Service wrote a poem titled “Carry on”.[18] In that poem, he wrote, “And so in the strife of the battle of life, it’s easy to fight when you’re winning. It’s easy to slave, and starve, and be brave, when the dawn of success is beginning. But it’s a different song when everything’s wrong . . . . “
The poetic reference about fighting when you’re down versus when you’re winning provides a perfect framework to contrast Musk’s early visionary thrill with the current grind of automotive competition. Musk may have been successful at pioneering a new market but is ill-suited for—and psychologically recoiling from—the brutal, low-margin grind of mass-market competition. His abandonment of Tesla auto isn’t accidental; it’s an emotional retreat into a new narrative where he can be the visionary again. The most logical conclusion is that Musk is not trying to “save” the car company because he has already written off that battle as unwinnable on his terms. This is about perseverance in adversity, not merely a business analysis. The main dimensions to Tesla’s very real decline are human, not strategic.
We’re not just looking at surface-level business metrics but trying to understand why Musk is actively reshaping Tesla’s narrative. These are not rational actions; there is a primary emotional component that has been entirely overlooked. The term “lost heart” captures a critical shift in motivation. This is the most coherent – and the only plausible – explanation for Tesla’s current state. Musk’s abandonment of the auto sector and re-definition of Tesla serves a dual purpose: it tries to attract investors interested in fairytale growth stories, and it psychologically distances Musk from the struggles of the car business, which can now be framed as a legacy division.
Elon Musk, the “Visionary”
Elon Musk, in his own eyes, is a creator, not a caretaker. Musk thrives on the “visionary thrill” of defining a new category. His public demeanor shifts to excitement only when discussing AI, robots, and space. Musk’s unique talent was in the “dawn of success” phase – defying skeptics, creating markets, and rallying believers. Looking at all the history, it appears that Musk can function emotionally only where he is in the forefront of something new, where he has the only product. That is why Tesla succeeded. There is a clear pattern where Musk thrives in uncontested environments but struggles when competition emerges, this pattern existing across Tesla, SpaceX, xAI, and the Robotaxi/Optimus projects.
The psychological pattern where Musk thrives as a pioneering visionary in uncontested spaces but recoils from direct, incremental competition, is the key to understanding Tesla’s monumental, high-risk AI pivot. Faced with an increasingly competitive EV market where growth has stalled, Musk is not “fighting” in the traditional sense. Instead, he is abandoning a mature, contested battlefield to stake a claim in what he perceives to be the next, uncontested frontier:full AI autonomy and general-purpose robotics. He is betting the company on becoming the definer and sole leader of these new categories, a position he finds more motivating and which, in his view, would render competition over cars obsolete. This is not a mere adjustment but a wholesale strategic retreat from the competitive car business to fund an assault on the future. Musk’s psychological makeup – his ability to function only when being a pioneer without contest or competition, will become his Achilles’ heel as all his ventures mature into competitive markets.
This context makes more intelligible Musk’s fantastic claims about Robotaxi and Optimus, which products are in reality highly questionable. His statements are not predictions based on a mature competitive analysis but instead are “visionary proclamations” designed to define the terms of a new market. In this visionary (and fairytale) world, Optimus is positioned as the foundational product in a new category of “universal humanoid robots”. The promise of the Robotaxi is similar. Yet the foundational scaffolding for both these products is deeply flawed, with neither product showing signs even of viability, much less of explosive success.
Elon Musk clearly lacks the temperament for the thankless, incremental work of defending a contested market. He is psychologically ill-suited for a grinding, peer-to-peer fight. His solution is to withdraw entirely from the fight and create a new game where he can once again be the visionary pioneer. There is so far no evidence that Musk can succeed – as Ford Motors and GM have done – when in sustained competition with peers. Musk isn’t a fighter in that sense. He knows only about building a spaceship to go to Mars, with an idea that excites everyone and where he is the only player.
A company in direct competition with well-funded equals requires a different kind of leader: one obsessed with quality control, supply chain efficiency, and dealership relations. Musk’s apparent “loss of heart” is from a recognition, conscious or not, that this is not his fight, and that his personal brand is better served by leaping to the next frontier. The immense risk is that he must now execute perfectly on a technological moonshot before the cash from his declining “cash cow” automotive business runs out. This alone may collapse his whole empire.
Elon Musk’s advantages and successes so far have been in uncontested areas. That is why Tesla was able to grow so quickly. When Elon Musk first floated the idea of FSD, he imagined he would have no competition, that his product would be one of a kind. That was why he claimed Teslas would be appreciating assets. If in fact Musk’s Teslas were the only car with FSD, they might appreciate. But BYD is giving FSD away free, and public acceptance of FSD under paid subscriptions has been very poor. It was the same with Optimus; Musk assumed he would have the world’s only humanoid robot that would produce trillions in revenue. If it really were the only robot, his prediction might have become true, but there is now so much competition that even if Optimus is a mass-produced success, it will be only a bit player. There is no chance of an Optimus so superior that it would lead the world. In fact, there is a good chance that a useful functioning Optimus may never see the light of day. Strangely, Musk still seems to be under the delusion that his Robotaxi and Optimus will be the only players and will have no competition. This is already clearly a fallacy, but there is no other explanation for Musk’s current claims that Optimus will produce trillions of dollars in profit when Optimus V2 is dead and there still is no functional prototype for V3, much less one ready for mass production. I have dealt with Optimus at length in an earlier article in this series, [19] and will deal with the Robotaxi and FSD in a following article.
Competition With a Flawed Product: “Move Fast and Break Things” Meets Reality
Tesla emerged when there was no competition.
There is a factor causing Tesla’s sales collapse, a factor that I have never seen mentioned anywhere, but which might be the most important factor causing Tesla’s sales decline. This factor is competition, but I believe it has been badly misunderstood. When we think of “competition”, we think of essentially equal companies or products vying for customers. Like GM competing with Ford, or McDonald’s competing with KFC. These are essentially peers, and the competition is of a standard, and particular kind. But with Tesla, the competitive picture has actually been very different. Tesla emerged when there was no competition. The choice for an EV was virtually Tesla or nothing, so it’s not a surprise that Tesla could realise 30% or 40% growth. The demand was there, and no one else was filling it at that moment. But then the landscape changed in a way that may be unusual.
We know that the first Tesla Roadster was badly flawed, as were the Model 3 and the Cybertruck, and the other models had many flaws and problems as well. The stories about Elon Musk sleeping in the Tesla factory are real, but the reason he did that was because the (Elon Musk-designed) Model 3 had so many flaws when it was already in mass production that the car had to be repeatedly re-designed while already on the assembly line, just to eliminate the faults. Musk claimed he knew more about manufacturing than anyone who has ever lived on earth. Except that he didn’t. This is a classic case study of a little knowledge being a dangerous thing. The fact is that Musk put the Model 3 into production long before it was ready, just like every other product he has made. But sales continued because this was “the only game in town”.
When competitors emerged and consumers could compare the Tesla to other choices, Tesla was immediately hurt, and badly hurt. In a short time, Tesla was seen as much over-priced, and not at all “premium” or “luxury” as advertised. Even worse, with the appearance of the multitude of choices in the market (primarily Chinese) Tesla was obviously not competitive on design and style, on features, on range, on autonomous driving, on IT and AI integration, and other factors.
This was not peer competition. It was a different kind of competition, where a first-mover in a market was too impatient and brought a badly-flawed product to market. When other competitors realised the demand was there, they created good products, and Tesla’s sales crashed. This kind of thing has happened before. Readers may be interested in the story of the Boeing 247 – the first “real airliner”. The airlines needed larger planes and Boeing produced this model, receiving an immediate order for 100 aircraft from United Airlines – which Boeing owned at the time. Douglas Aircraft watched closely, realised the enormous demand for such aircraft, and closely examined the Boeing version. They identified all the flaws and shortcomings of the Boeing 247 and designed a much-improved aircraft built with better materials. That aircraft was the DC-1, soon to morph into the famed DC-3, and the rest is history. The Boeing 247 died a quick and quiet death after selling its first 100 planes. This story is now repeating with Tesla and BYD (and others).
Musk had neither the knowledge nor the character to create a really good product, just as with his FSD, Robotaxi and Optimus V3, his rockets, and everything else. Even his Boring Company is facing lawsuits for moving too quickly with a flawed product. Elon Musk once more followed his “move fast and break things” philosophy. He had a clear entry into a vacant market with lots of demand, and his product sold well only because no one knew what a really good EV would look like. When many other companies entered the market and consumers could compare for the first time, they realised that the Tesla was overpriced, substandard, and lacking features that other manufacturers offered.
What this means is that initially Tesla (and Elon Musk) never faced “peer competition” (as between GM and Ford). Tesla enjoyed explosive growth in a vacuum with flawed products only while it had the only product. When competent competitors arrived offering better alternatives, consumers naturally migrated away. The Financial Times reported that Tesla’s share of global EV sales dropped to 15% as BYD surged past them with a 24% share. The Bloomberg analysis showing BYD’s Seagull outselling the Model Y in China by 4:1 is devastating evidence.
CNBC and Automotive News published pieces on Tesla’s quality issues, of recalls affecting about 4,000 Cybertrucks just months after launch; the Autopilot investigation; the 1,000 FSD crashes and 100 deaths. These perfectly illustrate Musk’s “rushed product with flaws” approach, and these aren’t minor issues but fundamental safety problems in flagship products. This is the same reason his SpaceX rockets repeatedly exploded, and the reason Tesla produced only 2% of US cars but had 20% of all recalls.An article in the Atlantic magazine provided crucial psychological context about Musk’s pattern of rushing imperfect products to market and his strategic aversion to true competition.
It is interesting how this thesis reframes the competition narrative – it’s not that Tesla is losing to peers, but that consumers are choosing vastly superior alternatives after finally having options. This has strategic implications for Tesla’s future, particularly the Robotaxi and Optimus projects that follow the same rushed-to-market pattern. Tesla is not losing a fair fight between peers; it is being exposed by competent alternatives after years of dominating a market with a substandard, overpriced first-mover product. It is this that created the fatal openings for competitors, the reason Tesla’s brand is steadily eroding, and the reason Tesla will fail. The honeymoon is over. Consumers no longer value Tesla as a unique tech marvel, but compare it to other brands on price, features, and quality—a comparison Tesla increasingly loses.
Elon Musk has always had a strategy of “Winning by Default”, not by excellence. Musk’s successes came in greenfield markets with no entrenched competitors. His playbook was to declare a revolutionary vision, attract capital and talent with it, and rush a first-generation product to market to establish dominance before others arrived. The quality of that product was secondary to the speed of its arrival. This strategy worked only as long as the market remained non-competitive. The moment competent, patient, and product-focused competitors entered—like BYD in EVs, Blue Origin in rockets, or a multitude in AI—the flaws in the rushed first-mover product become fatal liabilities. The competitors didn’t need to be “visionary”; they simply needed to execute well on the now-proven market demand.
Faced with this unwinnable grind of incremental improvement, Musk’s predictable response is not to fix the core product but to shift focus to a new, uncontested narrative. This is the exact function of the Robotaxi and Optimus announcements. They are not the culmination of Tesla’s automotive success but a strategic and psychological retreat from the automotive battlefield he has already lost. Musk’s response to failure is to execute a “Pre-Emptive Abandonment”. Hence the sudden re-definition of Tesla. Musk isn’t trying to win the EV race because, in his strategic framework, it’s already lost to better competitors. The goal now is to monetise and harvest the existing brand to fund the next leap. This is the most coherent explanation for Tesla’s current, otherwise irrational, strategy. The automotive business is essentially a “concluded experiment”. The high-stakes pivot to AI is in reality a flight from competition. The Robotaxi and Optimus are attractive precisely because they are new greenfield narratives. They allow Musk to reset the clock, be the visionary first-mover again, and attract capital based on future potential, sidestepping the present-day reality of competitive failure.
But there is a critical vulnerability here. This time, the competition is aware and moving faster. Waymo has a multi-year safety and operational lead in Robotaxis, as do many Chinese firms. Numerous well-funded robotics firms are working on humanoids that are in many cases vastly superior to Musk’s Optimus. The “vacant market” Musk needs for his pattern to succeed no longer exists, and this will turn his AI pivot from an “escape clause” into a “collision course” with established, capable players. This takes us beyond a simple list of Tesla’s problems to identify a business playbook that is spectacularly effective in a vacuum but catastrophically fragile in the face of genuine competition. Tesla’s sales collapse is the inevitable result. Based on this, the greatest threat to Tesla is not any single competitor, but the end of the era of non-competition across all its target sectors.
The new “greenfields” are already crowded. Unlike the early EV market, Tesla is entering the AI/robotics arenas as a laggard, not a pioneer. In both robotics and autonomous driving, well-funded competitors have substantial leads in technology, commercial deployment, and regulatory progress. The uncontested space Musk prefers no longer exists. The underlying problem is that Tesla’s future valuation is based on AI success, but its present cash comes from an auto business in decline. The company must now execute flawlessly on staggeringly complex robotics and autonomy projects while its financial backbone weakens. Analysts call 2026 a “make-or-break” year for this reason. In summary, Tesla’s initial product flaws were masked by no competition. When competent alternatives (BYD’s quality, Xiaomi’s features) arrived, consumers saw Tesla’s true value proposition: overpriced and under-delivered. This pattern is now repeating: The rushed, overhyped, and technically lagging development of Robotaxi and Optimus is running into established competition (Waymo, Chinese robotics firms).
The assessment of Musk abandoning Tesla as a race he has already lost, is definitely correct. This means the prognosis for Tesla is to fade out of auto manufacturing and move to “greenfield” areas. In fact, there is a video circulating that says “In a few years no one will even remember that Tesla sold cars. They will know it as an AI and robotics company.” I believe the first statement is true, but as to the second, Tesla may be remembered as one of Elon Musk’s multiple failures.
Management and Culture: Core Problems
Elon Musk has built a reputation on three main narratives. One as a bold visionary. The perception of a self-made billionaire and as a rebel fighting against corporate greed and government interference. But beneath this carefully constructed image lies a calculated opportunist. He plays both sides and manipulates systems for personal gain. He profits from the very institutions he claims to despise. Source
It is not a secret that Tesla suffers badly from a high-pressure, destabilising environment, with multiple sources revealing the company’s “brutal working conditions” for its staff. Musk’s unforgiving and obsessive management style – a high-pressure dictatorship that permits no dissent or challenges, has led to a mass exodus of key managers and engineers, particularly in the AI/Robotics areas that are critical to the new shift. There have been many published critiques of Tesla’s management and culture, all concluding that the problems with Tesla’s planned AI/Robotics development are systemic. Musk’s “move fast and break things” ethos is combined with a top-down culture of foolish media hype, high-pressure mandates, and wildly unrealistic timelines. This toxic internal culture makes the already formidable technical and commercial challenges even harder to overcome.
There is another point I have not seen addressed elsewhere, which is that Elon Musk’s “Hype Engine” has a real cost in all metrics. His public narratives (e.g., Optimus as the “largest product in history”) create immense internal pressure to deliver. When the technical reality—such as Optimus V2 being a canceled failure, or the limited, safety-driver-dependent Robotaxi pilot—diverges sharply from the much-hyped story, it damages morale and both internal and externa trust, a classic symptom of the “reality distortion field” breaking down.
The Inevitable Conclusion: The House of Cards
Tesla has lost its place as the top global seller of electric vehicles to Chinese company BYD, capping a year defined by outrage over CEO Elon Musk’s political manoeuvring and the end of United States tax breaks for customers. Source
Musk’s empire depends on the automotive cash flow lasting long enough to fund the AI moonshots. However, the strategy killing the car business is accelerating. The new AI ventures are entering crowded markets, not greenfields. Musk’s “loss of heart” has set in motion what may easily be a terminal cycle: abandoning a core business to fund doomed escapes into contested new ones. And Tesla’s trajectory now appears irreversible.
I think there is one factor on which the future of Musk’s entire empire depends, and that is the speed at which Tesla auto sales decline. Consumers are massively turning to other EV brands because they now have a choice and can see Tesla as overpriced, inferior, and lacking in features, so that decline could be rapid. I mentioned earlier that the BYD Seagull outsold Tesla’s Model Y in China by 4:1; this experience could be repeated in all countries and with all Tesla models. It is important that Musk is killing two of Tesla’s flagship models and the proposed new model 2, and no new models or total remakes are in planning. Tesla has simply gone into a holding pattern while putting extreme pressure on sales staff to sell more cars – without success.
It is very possible that this combination of circumstances could bring Tesla’s car sales to nearly a halt in only one year. The Chinese don’t need Tesla. They already have a vast product choice, so Tesla is quickly losing ground, and the same is true in all of Europe. Canada is now permitting Chinese EVs into the country and Tesla’s sales will almost certainly go to zero. That leaves only the declining US market. In this picture, it is very possible that Tesla’s total auto sales in 2026 could drop by 50% or more from 2025. If that happens, Tesla auto will be little more than a bit player in the auto industry by the end of 2027, and it might even exit the auto business altogether.
It seems to me that the only thing that provides hope for Musk’s robotics and AI world is a lot of cash, and that would have to come from Tesla auto sales because SpaceX is spending its extra cash supporting Musk’s x AI. If Tesla can continue to sell nearly 2 million autos a year for 5 to 8 years, Musk’s other ventures might survive. But if Tesla sales totally collapse in one or two years, the entire house of cards will fall. The main question is whether Tesla can prevent a rapid total collapse in auto sales.
The evidence is that Tesla is in a precarious position. The risk of a rapid decline is real, but the situation is a bit more complex and there are some buffers that could prevent an immediate collapse. The negative forces are (1) the intense global EV competition, (2) elimination of customer rebates, (3) the loss of carbon-credit revenue, and (4) “strategic neglect” of the auto business. Factors which might mitigate the decline would include (1) Tesla brand loyalty, (2) perceived leadership in EVs, (3) price cuts and financing give-aways.
A 50% drop in Tesla auto sales may not be the most likely scenario. However, customers are abandoning Tesla for perceived low quality and poor value, so the sales decline will not stop, and there is little that Tesla can do. The sales collapse is now almost entirely out of Tesla’s hands; the die is already cast, and future events are already decided.
It is true that Tesla still has some brand loyalty in the US and in China, but that can prove to be very fickle. When Musk was involved with DOGE in the US, consumer sentiment shifted so quickly and so violently that not only did Tesla sales (and share price) immediately plunge, but people in many states were vandalising Tesla dealerships and setting Tesla cars on fire. China is a very important market for Tesla, but this bears close watching. Chinese consumers have recently been abandoning many foreign so-called “luxury” brands from the realisation that domestic brands are equivalent or better at 10% of the cost. With platforms like “The Little Red Book”, consumer sentiment can change in days, and these changes are contagious. Just as Chinese consumers were initially infected with Tesla’s “premium” image, they can just as easily be infected with a realisation of the opposite.
I would make a note here that my personal experience with Tesla autos is minimal, but I will relate one event. I was a passenger in a Tesla employed as a taxi (with a driver). I have to say I was shocked by the totally featureless interior. The experience was like sitting in a dark grey cardboard box. The car was absolutely featureless. There was nothing, and yet this was Tesla’s most expensive model, a “premium” or “luxury” model. I have been in many luxury cars and I would honestly say that the Tesla was more reminiscent of the interior of a rubbish bin than a luxury auto. I related my experience to several friends who unanimously agreed and said, “I can’t understand why anyone would want to buy a Tesla”. I would add that I was further surprised at the poor quality of the interior materials and the surprisingly poor fit of so many parts. Musk hyped the “minimalist” design of the Tesla as “blue is the new red”, and it seems to have had some success for a while. But when I see the lavish interiors of the multiple brands of Chinese EVs today – and consider the prices – I honestly cannot imagine anyone freely choosing to purchase a Tesla. I cannot.
Selling Tesla cars
Tesla is being squeezed out of the Chinese market, workers are being pushed to their limits. Source
Any auto dealer will tell you they have senior sales staff who have been with them for ten or even 20 years. But in China, Tesla puts such extreme pressure on the sales staff, that in some locations they have 100% turnover every 6 weeks. What is happening?
This is the story: Anyone who takes a sales position for consumer products like cars or life insurance, will first look for customers among their family and close friends. They always begin at home because they haven’t the experience to find customers among strangers. But after that, the easy sales are gone and selling is just hard work. Tesla in China hires new people and exposes them to intense pressure to sell at least 30 cars per month, or be fired, and further demands 13-hour workdays, 7 days per week.
These new young hires are anxious and afraid, and expose their family members and close friends to intense pressure to “buy a car from me or I will be fired.” And they will usually get a few quick sales. But now the “low-hanging fruit” is gone, and sales to strangers will be much more difficult. But that doesn’t matter to Tesla. The plan is to hire young persons who can sell a few cars to their family and friends. After that, they are disposable, so Musk and Tesla dispose of them. And that’s why the sales staff turnover is 100% every 6 weeks.I believe the picture is similar in Europe and in the US as in China.
This is a systematic, cynical approach to sales, sociopathic and rather dirty, that prioritises short-term gains by exploiting new hires’ personal networks before burning them out. This high-pressure environment extends beyond sales to factory workers, with morale problems so severe they required special training sessions. This toxic culture exists even within Tesla’s HR department itself. There are many reports of Tesla HR managers being punished or fired for resistance or complaints, with a strong pattern of suppressing internal criticism. This top-down culture of pressure and denial is not isolated to China; similar crises and high turnover have been reported in Tesla’s US operations.
This is a strategy of maximising immediate cash flow, not building a sustainable sales culture. Tesla’s current sales practices are symptomatic of a company in strategic retreat from its original business. And, in anything Elon Musk touches, the human cost is secondary to short-term targets. From the perspective of a cynical analyst, Tesla’s “burn-and-churn” model in China is a logical, if brutal, component of a company in transition. The six-week turnover cycle is efficient for a company in Tesla’s position. It rapidly harvests the “low-hanging fruit” from a salesperson’s network before discarding them, avoiding the cost of long-term development.
The End Times
Tesla’s car business is now a “Zombie”. It will continue to sell vehicles, but becoming a smaller, niche player in the global auto industry, similar to other storied brands that failed to scale. The cynical forecast is not for an immediate collapse of Tesla, but for a managed decline of the automotive division, paralleled by an aggressive promotion of the AI narrative. If the Robotaxi/Cybercab projects fail to convincingly demonstrate a near-term technological leap (as they are almost certain to do), the financial logic of the entire strategy collapses. The cash cow will run dry before the new bet pays off.
The danger is that the markets for AI/robotics is far from “uncontested”, and Tesla’s (and Elon Musk’s) entry to them may trigger the same collapse we are seeing in the auto sector. Tesla’s “pivot” appears destined to repeat the same cycle unless Musk fundamentally changes his approach, which seems unlikely given his stated psychological pattern and his legendary blind stubbornness. In fact, this pivot is already showing signs of the same “rush and expose” pattern that has defined Musk’s history. Musk is executing a perilous strategy, motivated not by a desire to save his first love, but by the need to salvage his legacy and find a new “winning” battle where the visionary thrill still exists.
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Mr. Romanoff’s writing has been translated into 34 languages and his articles posted on more than 150 foreign-language news and politics websites in more than 30 countries, as well as more than 100 English language platforms. Larry Romanoff is a retired management consultant and businessman. He has held senior executive positions in international consulting firms, and owned an international import-export business. He has been a visiting professor at Shanghai’s Fudan University, presenting case studies in international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai and is currently writing a series of ten books generally related to China and the West. He is one of the contributing authors to Cynthia McKinney’s new anthology ‘When China Sneezes’. (Chap. 2 — Dealing with Demons).
His full archive can be seen at
https://www.bluemoonofshanghai.com/ + https://www.moonofshanghai.com/
He can be contacted at: 2186604556@qq.com
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NOTES – Part 22
Tesla is Dying (2 of 3)
[1] Dark Clouds Gather Over Tesla as Sales Plummet Worldwide
https://futurism.com/the-byte/tesla-sales-down-worldwide
[2] Even Tesla’s Board Are Dumping Their Stock
https://futurism.com/even-tesla-board-dumping-stock
[3] Tesla registrations — and public opinion — are in a free fall
https://www.theverge.com/news/629667/tesla-elon-musk-donald-trump-doge-polling-data
[4] Tesla Sales Fall Off A Cliff Globally, Including Germany, Australia, And China
https://www.carscoops.com/2025/03/tesla-sales-falling-off-a-cliff-globally-including-germany-australia-and-china/
[5] Tesla sales continue to slump across Europe despite April EV sales swell
https://techcrunch.com/2025/05/05/tesla-sales-continue-to-slump-across-europe-despite-april-ev-sales-swell/
[6] Tesla Sales Are Tanking Across The World
https://insideevs.com/news/750076/tesla-sales-tanking-globally/
[7] Tesla Sales Decline in California With Model 3 Plunging 36%
https://www.bloomberg.com/news/articles/2025-02-03/tesla-sales-decline-in-california-with-model-3-plunging-36
[8] Tesla sales plunge: Biggest decline in history
https://edition.cnn.com/2025/04/02/business/tesla-sales/index.html
[9] Tesla continues to “haemorrhage” losses in Europe, as fleet operators look elsewhere
https://thedriven.io/2025/05/20/tesla-continues-to-haemorrhage-losses-in-europe-as-fleet-operators-look-elsewhere/
[10] Dark Clouds Gather Over Tesla as Sales Plummet Worldwide
https://futurism.com/the-byte/tesla-sales-down-worldwide
[11] BYD posts robust growth in car sales as it takes on Tesla globally
https://edition.cnn.com/2025/04/02/cars/china-byd-strong-car-sales-tesla-hnk-intl/index.html
[12] China’s NEVs break through in Europe, accelerate overseas expansion
https://www.shine.cn/biz/auto/2506094504/
[13] BYD outperforms Tesla in Europe
https://www.shine.cn/china-biz-buzz/2505245473/
[14] Competition intensifies! Tesla (TSLA) sales in China in February 2025 were “cut in half”
https://www.tradesmax.com/component/k2/item/22152-tesla
[15] China auto registrations, 2025-04
https://carnewschina.com/2025/04/22/china-ev-registrations-in-week-16-nio-5400-tesla-6800-xiaomi-7200-byd-56300/
[16] Cliff fall 63.6%! Tesla’s monthly sales in China hit its worst in three years
https://chejiahao.autohome.com.cn/info/24030173?reply=reply#pvareaid=2808151
[17] Plummeted 63.6%! Tesla’s sales in China collapsed, and domestic car companies soared 169%
https://www-lf.dongchedi.com/article/7571385709160841771
[18] Carry On
https://www.poetry.com/poem/32040/carry-on
[19] Debunking Elon Musk – Part 20 — Optimus, the Failed Fraud
https://www.bluemoonofshanghai.com/politics/23169/
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