Outlook Technological advancements aim to end Tesla's downturn

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Declining sales, criticism of the founder, and a slowed Autopilot system—Tesla is falling behind its targets. However, improvements are expected in 2025, with Elon Musk promising new technologies.

Self-driving cabs and robots: following modest quarterly figures, Tesla CEO Elon Musk has showered investors with visions of the future. Among other things, he announced the launch of the electric car company's first robot cab service in the US city of Austin in June—and in many countries around the world by the end of next year.

Musk has long promised that all Teslas will drive autonomously. He announced back in 2018 that a Tesla would drive driverless from one US coast to another. That still hasn't happened yet. So far, even the advanced version of Tesla's "Autopilot" system, nicknamed "Full Self-Driving" (FSD), needs human supervision. Meanwhile, Google's sister company Waymo offers robotaxi services without humans at the wheel in several US cities.

Tesla recently missed Wall Street's expectations. The electric car manufacturer's revenue in the final quarter of 2024 increased by two percent year-on-year to 25.7 billion dollars. However, analysts had expected an average of around 27.3 billion dollars. Turnover in the pure car business fell by eight percent to 19.8 billion dollars. The quarterly profit fell by 71 percent to just over 2.3 billion dollars.

Tesla outlook

Musk's statements are scaring off more and more potential buyers

Tesla suffered the first decline in deliveries of its electric cars in more than a decade in 2024. The US manufacturer led by tech billionaire Elon Musk delivered just under 1.79 million vehicles to customers. That was 19,355 fewer than in 2023. Musk had forecast a slight increase. However, Tesla would have had to deliver 515,000 cars to customers in the final quarter to achieve this. Despite a sales offensive, only 495,570 vehicles were sold in the end—still a record figure, albeit below the average estimates of market observers.

Dispute over the right technology

Tesla shares have been soaring since the US presidential election in November. This was triggered by Musk's closeness to US President Donald Trump. Musk himself said that he sees Tesla "between two waves of growth". He is focusing primarily on autonomous driving technology and presented the prototype of a robotaxi without a steering wheel or pedals in October.

With his proximity to Trump, Musk could build up pressure for more favorable regulatory conditions for self-driving cars. Meanwhile, critics of Tesla point to an ageing model range from the industry pioneer, which recently only added one niche model in the form of the Cybertruck electric pick-up.

There is also the question of how reliable Tesla's autonomous driving technology is. Unlike the majority of the industry, Musk insists that cameras are sufficient for self-driving cars—and that they do not need the more expensive laser radars that Waymo, among others, relies on.

If this works, Tesla will have an enormous cost advantage and could actually turn several million vehicles into self-driving cars via software updates. However, experts fear that safety could be compromised, as the laser radars, also known as lidar, scan the vehicle's surroundings in three dimensions in a way that cameras cannot.

Skepticism in the industry

Other manufacturers categorically reject the idea of sending autonomous cars onto the road with cameras only. BMW Board Member for Development Frank Weber recently said: "It is absolutely clear to us that this is not possible." For example, a camera would not recognize a pallet lying on the road in front of the car, he argued on the sidelines of the CES technology trade fair. The head of electric car manufacturer Polestar, Michael Lohscheller, also recently said that they are sticking with lidar in their vehicles.

E-mobility

Tesla sells fewer cars in 2024

Musk, on the other hand, reiterated his position on Wednesday: "People drive without shooting laser beams out of their eyes." Laser radars are not the right technology for road traffic. And Tesla is sticking to its position that production of robotaxis without steering wheels and pedals should begin next year.

Allegedly too many rules in Europe

When it came to the timetable for Europe, Musk criticized the fact that there were too many rules. This is why people mock the fact that America is developing innovations and Europe is regulating, he said. For example, the approval of "full self-driving" in Europe will not go to the next instance until May, "even though it works really well".

However, with the current version of the "self-driving" system, drivers in the USA reportedly often have to intervene. Meanwhile, Waymo announced a few hours before Tesla's conference call that it would be sending test vehicles to a further ten US cities.

Robots for 20,000 dollars

Musk also raved again about Tesla's humanoid robots called Optimus. He said that they had precisely functioning mechanical hands so that they could thread sewing thread into a needle or play the piano. And with a production rate of one million robots a year, the manufacturing costs would be kept below 20,000 dollars.

Musk is basing the prospect that Tesla could be by far the most valuable company in the world on autonomy and robots. This worked with investors: the share price rose by four percent in after-hours trading.