Tesla (NASDAQ: TSLA) is more than just an electric vehicle (EV) company—at least, that’s what CEO Elon Musk wants investors to believe. With grand promises of autonomous vehicles, AI-powered robotaxis, and even humanoid robots, Tesla is positioning itself as a technology leader. However, when you look at the financials, the company’s core business still relies heavily on EV sales, which are showing signs of stagnation.
Tesla’s EV Sales Hit a Roadblock
Between 2020 and 2023, Tesla’s vehicle deliveries soared from 500,000 to 1.8 million. But in 2024, that number dipped slightly to 1.79 million, despite aggressive price cuts aimed at boosting demand. Meanwhile, competition in the EV market is heating up. Chinese automaker BYD delivered a record 4.27 million vehicles in 2024—more than double Tesla’s output—and is expanding its global footprint.
Tesla’s market share is slipping in key regions like the United States, Europe, and China. While the company is banking on the updated Model Y and the highly anticipated Cybertruck to reignite sales, early indicators suggest the Cybertruck may not be the game-changer many investors hoped for.
For 2025, Tesla has guided for delivery growth but stopped short of specifying a target. This is a significant shift from its previous promise of 50% annual growth, making delivery numbers a critical metric to track in the coming years.
The AI and Robotaxi Bet
Despite a slowdown in EV sales, Tesla stock has surged 75% in the past year. Why? Investors are buying into Musk’s vision of AI-powered transportation and automation.
One of the most anticipated projects is the Cybercab, a self-driving taxi set to begin production in 2026. If successful, it could challenge Waymo and other autonomous ride-hailing services. However, Tesla has faced delays in achieving full self-driving capability—a goal Musk originally promised nearly a decade ago.
Tesla is also pouring billions into AI infrastructure, betting that self-driving technology will unlock massive value. But with regulatory hurdles and fierce competition from established players, the road to profitability remains uncertain.
Can Optimus Change Tesla’s Future?
Beyond AI-driven vehicles, Musk is hyping Optimus, a humanoid robot designed to revolutionize industries from manufacturing to household labor. While Musk has suggested this could make Tesla worth $25 trillion, the product is still in early development. Unlike EVs and AI software, Tesla has no proven track record in robotics, making this a highly speculative venture.
Is Tesla’s Valuation Justified?
Tesla currently boasts a $1.1 trillion market cap but generated only $3.6 billion in free cash flow over the past 12 months. That equates to a staggering 300x free cash flow multiple, meaning investors are pricing in massive profit growth over the next decade.
With the EV market slowing and AI bets still unproven, Tesla’s valuation suggests extreme optimism. While the company has defied skeptics before, the next few years will determine whether Musk’s ambitious vision becomes reality—or remains another promise on the horizon.
