Tesla in mess as Musk looks beyond cars

Tesla sales are in a deep funk. Elon Musk insists he doesn't care.

- Becky Peterson & Sean Mclain

The electric-car pioneer is stuck in one of its worst sales streaks, with the company reporting Wednesday that global vehicle sales fell 13.5% in the second quarter, compared with a year ago. Vehicle deliveries also dropped 13% in the first quarter.

Rivals from General Motors to China's BYD, in the meantime, have churned out high-tech vehicles, stealing market share. And Congress is preparing to pull the plug on U.S. tax credits for electric vehicles—at a time when consumers are shifting back to buying traditional cars.

"I'd encourage people to look beyond the bumps and potholes of the road immediately ahead of us," Musk told investors in April. "Lift your gaze to the bright shining citadel on the hill."

Up on that hill is Musk's promise of self-driving taxis and humanoid robots.

Even though three-quarters of Tesla's roughly $100 billion in revenue in 2024 came from selling cars, Musk has been telling investors that he has shifted his focus to transforming the company with autonomous vehicles and robots.

Last year, Musk froze work on a new affordable model, dubbed the Model 2, which was supposed to cost $25,000. Asked by an investor when Tesla might revive that model, Musk said the company was focused on building a version of that car, called the Cybercab, without steering wheels or pedals. "I think having a regular $25,000 model is pointless. It would be silly, like it will be completely at odds with what we believe," Musk said.

The stainless steel Cybertruck, which hasn't sold well, is the only new Tesla model in the last five years. Earlier this year, executives said they were focused on reducing prices of its current lineup. "Monthly payment is the biggest differentiator for our vehicles," Lars Moravy, vice president of vehicle engineering, said in April.