Tesla CEO Elon Musk is facing a tough time as its stock dropped 6% following news of Chinese rival BYD’s plans to develop autonomous vehicle technology with DeepSeek. This move raised concerns about Tesla falling behind the competition, especially with the announcement that BYD would offer its Autopilot-like system in most of its new cars. Musk’s focus outside of Tesla, including involvement in OpenAI and the Trump administration, has also raised eyebrows among investors.
Tesla has seen its stock price decline for five consecutive days, losing nearly 17% and wiping out over $200 billion in market cap. BYD, seen as Tesla’s strongest global competitor, recently revealed that 21 of its new models would feature partially automated driving systems. In contrast, Tesla’s electric vehicles still require a human driver to be present at all times.
The competition in the autonomous vehicle space is heating up, with Waymo expanding its robotaxi service in Los Angeles and analysts highlighting potential profitability challenges for Tesla due to increased competition. Despite Musk’s ambitious plans for driverless cars in Texas, analysts caution that Tesla is not the only player in the autonomous technology market.
Elon Musk’s Diverse Portfolio
Apart from leading Tesla, Musk wears many hats, including CEO of SpaceX, owner of social media company X, and head of artificial intelligence startup xAI. He has been actively involved in government operations in Washington, D.C., running the “Department of Government Efficiency” to streamline federal processes and regulations. Musk’s bid for OpenAI, a company he helped found, has added to concerns about his ability to juggle multiple projects.
OpenAI, initially established as a nonprofit research lab, has evolved into a commercial entity offering products like ChatGPT. Musk’s bid for the company, which is seeking to transition to a for-profit model, has sparked legal disputes and raised questions about his priorities. The bid, amounting to $97.4 billion, has left investors wary of Musk’s focus on ventures outside of Tesla.
Challenges in the Autonomous Technology Landscape
Analysts have pointed out that Musk’s involvement in OpenAI and other ventures could distract him from addressing Tesla’s challenges in the face of fierce competition. The shift toward becoming a Physical AI player has raised concerns about the company’s ability to keep up with developments in the autonomous technology sector. Musk’s bid for OpenAI, seen as a potential distraction, has led to speculation about the future direction of both companies.
While Musk’s endeavors have garnered support from some quarters, there are concerns about how his public image and government affiliations could impact Tesla’s standing. Reports of declining vehicle registrations in California and European markets have underscored the need for Musk to balance his various roles effectively to maintain investor confidence and consumer trust.
As the competition in the autonomous vehicle market intensifies, Tesla faces mounting pressure to deliver on its promises while navigating challenges on multiple fronts. Musk’s ability to steer the company through these turbulent times will be closely watched by investors, analysts, and industry observers alike. The next few months will be crucial in determining Tesla’s trajectory and Musk’s capacity to manage his diverse portfolio effectively.
