Why Tesla’s Future Looks Riskier Than Ever

Forbes

Tesla just posted its worst quarterly results in four years, and investors are starting to ask tough questions. In this interview, Forbes reporter Brittany Lewis speaks with senior editor Alan Ohnsman about what’s really going wrong at Elon Musk’s electric car company. From declining sales and brand damage to tariff pressures and a lack of new products, the conversation explores why Tesla’s future looks increasingly uncertain. Musk is doubling down on ambitious ideas like robo-taxis and humanoid robots—but Ohnsman argues those aren’t enough to solve the company’s immediate problems. Is Tesla running out of time—and investor patience?  Read the full story on Forbes: https://www.forbes.com/sites/alanohnsman/2025/04/25/elon-musk-is-running-out-of-ideas-to-save-tesla/  00:00 – Intro: Elon Musk Running Out of Ideas 00:41 – Tesla’s Core Business Is Struggling 02:42 – Energy Storage Bright Spot Faces New Threat 04:40 – Should Elon Still Be CEO? 06:23 – The Model 2 That Wasn’t 08:47 – Tesla’s Lack of New EVs 10:04 – Musk’s Political Fallout and Brand Damage 12:36 – What Tesla Must Fix First 14:26 – How Trump’s Tariffs Hit Tesla Hard 17:14 – Can Tesla Deliver a Good Q2? 19:53 – Is There Appetite for Robo Taxis? 22:05 – Will Investors Keep Waiting for Results? 24:11 – The Urgent Need to Refocus on Core Business 25:53 – Outro: Is 2025 Make or Break for Tesla?  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes. Joining me now

00:07is Alan Oinsman, senior editor and author of The Current Climate Newsletter. Alan,

00:12thanks so much for joining me. Hi, Brittany. Good to be with you.

00:16I want to read your latest reporting headline. You write this,

00:20Elon Musk is running out of ideas to save Tesla. And in our conversations within really the past

00:26weeks, you've said things are bad at Tesla. And you're reporting last week, the company posted

00:30its worst quarterly results in four years. So dive a little bit into the numbers for us to start off

00:36the conversation. Explain exactly the state Tesla is currently in. Well, I'll start with the headline

00:42for the story that Elon's out of ideas. And that might seem counterintuitive to some people because

00:48he is announcing some new things. Those include a robotaxi program that is supposed to kick off in

00:56Austin next month, the potential for Tesla to be a huge AI play at some point, and also humanoid

01:03robotics, their optimist program, where they're building human style robot workers. So one might

01:09think those are ideas. And I would say those are ideas. And that is all that they are at this point,

01:15meaning they're not businesses. There is no way to model and project earnings for any of these things.

01:21Elon throws a lot of numbers out saying robots will be a trillion dollar business. Okay, maybe.

01:28But if I'm an analyst, if I'm an equity analyst, and I'm trying to bake in what are the things I know

01:34in terms of existing businesses and trying to project forward earnings, I can't model those.

01:40That, you know, it's what's called hopium. Like, you know, one might, one might wish that these

01:46things come true. But right now, they're not real concrete businesses. So we have to kind of set those

01:53aside. When I say he's out of ideas, what I'm talking about is the core business of Tesla. And it boils

02:00down really to three things. Electric vehicles, battery and energy storage systems, and charging services,

02:08both for its own customers and for other companies who use Tesla chargers. That accounts for something like

02:1595 or 96% of all of its revenue. So those are really the key things. And if you look at each of those three

02:22areas, this is where there are problems. And that's why I say his ideas don't seem to extend to the core

02:29businesses. And that's really the rub right now. Looking at where Tesla is, as you mentioned, Q1 was very bad.

02:38You know, a 71% in net income will get your attention. That's a precipitous drop. The bigger

02:44issue is the brand and Elon are becoming toxic for many people. So Elon leaving day-to-day Doge

02:55activities and coming back to Tesla sort of full time. But remember, he's also still doing SpaceX,

03:01XAI, Neuralink, The Boring Company, maybe other companies he's planning to throw out there. So

03:09when you say he's back full time, well, ish. You know, he's sort of back. So the business itself,

03:17what we need to see from Tesla is some excitement and some new products on the electric vehicle side.

03:24And unfortunately, the cupboard's kind of bare right now. So coming into Q2, there's no indication

03:30that the problems that dog Tesla in the first quarter have been solved. And those have to do

03:37simply with selling electric cars. The bigger issue also relates to Tesla's energy storage business.

03:45And this is a critical one because that was a bright spot in the first quarter. It was a booming growth

03:51area. A lot of those orders are for things like utilities that order large scale battery systems

03:57to store renewable energy. Tesla has shifted to using what's called an LFP or lithium iron phosphate

04:07battery cell. Those come from China. Well, currently, because of the tariffs that went into effect at the

04:16beginning of Q2, those cells now are out of the range too expensive. There's an additional 145%

04:24markup, which means there's no economic incentive to use them. They're not manufactured domestically,

04:31at least in quantity. So the battery business that was very encouraging for Tesla in Q1 doesn't look

04:38that great in Q2. So, wow. Okay. Laundry list of problems here. Let's first start with Elon as the CEO.

04:45So he's said that he's going to eventually step away from Doge. Is there any indication that when

04:51he does step away, when he is a more present CEO, that Tesla will be his top priority? Because as you

04:57said, he has other companies. He has enough jobs for about 10 people. Neuralink, SpaceX, X, the boring

05:04company, just to name a few. And if he does become a more hands-on CEO, is that enough to turn things

05:10around to Tesla? Because there's almost like a double-edged sword problem here with Elon Musk as

05:15the CEO. People want him to spend more time at the brand, but he's also toxic for the brand. So what

05:21does that look like? Should he come back in a more hands-on approach? Again, I would go back to a

05:28conversation we had previously that, honestly, at this point, the best thing for Tesla would be a

05:34management change to bring in a fresh face. Elon certainly has done quite a job getting Tesla up

05:40and running, building out the company. He has other interests at this point. So Tesla is competing

05:46for his time. That's never a great thing where one of many companies is saying, pay attention to me,

05:52focus on me. And where I see real evidence of that, again, is the lack of fresh new product.

05:59What Tesla is working on right now is a refreshed version of the Model Y that's hitting the market

06:04now, and then promises of lower-cost versions of both the Model Y and the Model 3, which may find

06:12some sales. But doing decontented or cheaper versions of existing cars typically in the auto

06:20industry doesn't attract a lot of new business. If you want a cheaper Tesla, just buy a used one.

06:25You can get a used one for not much right now. So you have a new product, a new decontented product

06:33that may cost the same as a used Tesla with much more range and more features. So that sort of

06:40undercuts that strategy. In the piece that you referenced that we put out recently, one Tesla

06:48investor who's been a longtime Tesla fan and more recently is a critic of Elon thinks the simplest

06:55solution would have been that Tesla put back what was called the Model 2. It was a lower-priced

07:02project that was in development for years. It was shown last fall when Elon unveiled the Tesla

07:09CyberCab at Universal Studios here in Los Angeles. It's a two-door, smaller model, and it looks like

07:16something that could be very interesting if it were sold as a new standalone Tesla product.

07:21But what he said is, this will only be sold as a robotaxi. It'll cost about $26,000 or $27,000. But

07:30what was a little unclear is, is this a commercial vehicle for individuals or is this more of a fleet

07:35vehicle for people that want to operate or companies that want to operate robotaxi fleets? A lot of that's

07:40very murky. What Ross Gerber, the Tesla investor, said was, look, just sell it as a straight-up electric

07:46car. There's nothing like it in the market right now. It's a new niche. It would be affordably priced.

07:52There you go. And he's right. The simplest thing that Tesla could do is just come out with some

07:59compelling new products. Cybertruck came out a year and a half ago. It's not been a great seller.

08:04It's very expensive. It's too niche-y. They are bringing out the semi, the Tesla semi-truck.

08:10Again, the semi-market, the Class 8 commercial vehicle market is small. So even if Tesla begins

08:18selling this new electric semi-truck, it's not going to add that much to the bottom line. Where you get

08:25that is with these mass-selling, mass-market EVs. Model Y is the best example of that. That's been a

08:32home run for Tesla, an unquestioned home run. The Model 3, also a great seller. So logically,

08:39do another mass-market, highly appealing vehicle. Problem solved. But that's not apparently what

08:46they're doing right now. It doesn't seem like that's what they're doing. It seems like Elon is

08:51throwing out these pie-in-the-sky ideas with AI, robo-taxi, humanoid robots. And as you said,

08:57those are just ideas. Has Elon in any way acknowledged the issues and the dismal sale

09:04numbers that Tesla is facing right now? And how has he acknowledged them, if so?

09:09He acknowledged that the numbers weren't great, and he acknowledged some of the blowback against him.

09:16However, during the earnings call last week, he blamed it on paid protesters and claimed that many

09:22of the people that have been at these anti-Tesla, anti-Elon rallies are disgruntled government workers

09:28that have been cut by Doge. I can assure you that these are not paid people. I've interviewed

09:33protesters both here in L.A. and in Southern California, and these are people that are just

09:38angry. And some of them are former Tesla owners who've dumped their cars or are planning to get rid

09:45of them. So I don't think he's acknowledging the reality of the situation, that it boils down to

09:52him. And we also have to point out, this began before Doge. Elon's decline has been going on

09:58for some time. It really started when he bought Twitter in 2022. He's always been very vocal on

10:06social media and unrestrained to his own detriment. He's occasionally been accused of making not just

10:13insensitive comments, but some that have been seen as racist, misogynistic, anti-trans, anti-Semitic

10:19even at times. That's not been good for his reputation. And there's a reason why most CEOs

10:25don't do that. You know, he plays by different rules. So I'm not sure he recognizes the scope of

10:34the situation right now. I would be shocked if he announced that he was stepping away.

10:40I don't expect it to happen. I do think it would be a positive for the brand. I think you have Tesla

10:47loyalists that would not like it. But I think you'd have a lot of other investors that would like to

10:52see the brand under fresher, different, less controversial management. I think that would

10:58be a net positive. And I think the sadness of all this is, without question, Tesla has been the pioneer

11:05in electric vehicle sales. You can't take that away from the company. It really jump-started a

11:11non-existent market several years ago. And it has had this great opportunity to grow the brand

11:19meaningfully. And at least as far as EV sales go right now, they've topped out. Sales declined in

11:252023. They dropped in 2024. And the expectations are they're going to drop more sharply in 2025.

11:33So have we seen the peak of Tesla's sales as an EV player? We probably have. Based on what we know

11:40right now, there's no indication that the sales decline for Tesla electric vehicles is going to

11:45be reversed. I don't know that he acknowledges that. What he would say is, that's okay, because we're

11:51going to have these other businesses that will make even more money and everything will be fine.

11:55That's really incredible that you're saying that because Tesla was really on the cutting edge when

12:00it came to EVs. And it seems like the rules that Elon Musk is playing by are really hurting his bottom

12:06line. And you and I have talked about the different camps of problems Tesla finds itself in. The one

12:12being the brand problem with Elon Musk being so linked to the product, to the product issue with

12:18Cybertrucks having dismal sales and the company having an issue selling electric vehicles, as you

12:24said. And the third being that now there are viable competitors in this space. What problem do you think

12:31is A, the most serious and B, needs to be addressed first? I think on the product side, you know, it should

12:40be all hands on deck. I think they should try to come out as quickly as possible with a fresh new model,

12:46and especially something in a new segment, especially because we know there are going to be

12:51lower cost US competitors. Globally, there already are many lower cost options to Tesla. We don't see

12:59them in the United States because they're mainly Chinese. There's going to be a very compelling

13:03domestic competitor coming later this year, and that will be the third generation Bolt from General

13:09Motors. It's going to be fully redesigned, and it's probably going to come in at that sort of sub

13:14$30,000 price point with maybe 300 miles of range and nice utility in a smaller vehicle that'll sell

13:21great in markets in California, here in LA, places like that as an urban, a good urban EV.

13:28Right now, Tesla really doesn't have anything new in that space. This, again, the Model 2 slash

13:35Cyber Cab vehicle would have kind of slotted into that, but they're not bringing it out as a standalone

13:40product. That's a mistake, I think, and an obvious one. In the auto business, the simplest fix is new

13:48product. That's it. It ain't rocket science. Rocket science is SpaceX, but when it comes to Tesla,

13:54it's the car business, and it's like, just come out with something new, not lightly refreshed versions

14:01of existing product or decontented cheaper version of existing product, especially when that means you're

14:07going to be competing with your own used models. And this is a problem now that's not unique to

14:14Tesla, and that's tariffs. Tariffs affected Elon Musk's net worth when they were unveiled, and now

14:20they're hitting Tesla, too. Talk to us about the impact of President Trump's tariffs on the company.

14:26Well, Tesla is fairly heavily domestically sourced, so it's a little more insulated. It doesn't import any

14:36models it sells here, but especially things like steel and aluminum that comes from Canada, and some

14:41some grades come from overseas. It would definitely be affected by that. It uses electronics and

14:47components supplied by Japanese and Korean companies. Those will be affected, and those will get more

14:53expensive. I think they just announced, you know, they raised prices in Canada, Tesla did, just this week

15:02on their products there. I don't know if that's going to matter, because, you know, Canada's already

15:06had kind of a boycott on American products, and specifically Tesla. So I'm not sure raising the

15:11prices at this point is going to matter. So that's been a real problem. The bigger impact, though, that

15:17I think you'll see will be on the battery business, the energy storage business. Again, that reliance on

15:23Chinese cells that Tesla had built up. Last year, they announced a partnership with CATL of China, which

15:30is the world's biggest maker of EV batteries. And they were planning not just to license, buy cells

15:37from CATL, but also license the technology and set up domestic manufacturing in Nevada of these LFP

15:45cells from CATL. That project is not complete, and it's not going to happen now because of the

15:52tariffs. Because while Trump may dial back tariffs selectively in some areas like auto parts and on

15:59some countries, the Chinese tariffs are not changing at this point. They're 145%. So what that means is

16:07Tesla's no longer going to have access to cheap imported Chinese cells, nor was it able to complete

16:13installation of manufacturing equipment to make them domestically. So what that tells me is their

16:20energy storage business is going to get hammered in Q2. And again, it was a bright spot. There were

16:26two bright spots for Tesla in Q1, and that was the energy storage business. And the second one was

16:31ZEV credits or regulatory credits, selling pollution credits to other automakers. It's unclear

16:38in the case of the credits what that market's going to look like in Q2.

16:43Did they move some of those credits ahead early to book them in Q1 that they could have held on to

16:51in case they needed them in Q2? We don't know. But that business is always kind of unpredictable,

16:56how big that's going to be. The battery energy storage business is going to get hurt. So those

17:02two areas don't look good. And if their sales trend remains as it has been for the last few months on the

17:09EV side, Q2 is not going to be a good quarter. Well, that doesn't sound good. The sale, if the

17:16sales trend is looking like it has been not good for Tesla, bleak outlook there. Are there any bright

17:22spots that you're looking at for the rest of Q2 and possibly beyond throughout the rest of 2025?

17:27That's a tough one. Honestly, right now, based on everything we know, no. June is going to be

17:40interesting because they're launching this robo taxi program in in Austin, Texas, and it's going to

17:47start small 10 to 20 vehicles. Some of the reporting on that, however, does raise concerns. There was a

17:54piece on Friday by Business Insider pointing out, based on interviews with people who've worked on

17:59the testing of that program, that maybe things are being a little bit rushed, that there's an urgency

18:06to meet a June deadline. That's a little concerning if true, because this is a system where safety has to

18:15be absolutely the top priority. People can get killed. Other vehicles, you can have accidents and

18:20collisions with other vehicles. You don't want to rush something like this. The contrast would be the

18:26Waymo program, which has gone on for years, 16 years they've been working on it. And only within

18:34the last 18 months or so did they really begin to ramp up their robo taxi business beyond, say, Phoenix.

18:42They were very cautious and they were, you know, wanting to avoid, you know, serious accidents,

18:49fatal accidents, accidents involving injuries. They've been very fortunate so far in that they

18:55haven't had any. You never want to hear someone's rushing anything or doing anything with urgency when

19:02it involves an autonomous vehicle where there's no human driver at the wheel. You want to make sure

19:08that that system is as rock solid as possible before you launch. So I think if that launch goes

19:15well and smooth and there are no accidents in June and they grow it a little bit in July and they grow

19:21a little bit more in August, that could be a positive sign. What we don't know, though, is is it actually

19:28a revenue generator and is it profitable? Because what we do understand is that Tesla is going to have a lot

19:35of back-end people on that system, remote operators, people monitoring the system. I can give you a

19:42robo taxi ride, but if I have 10 people watching the car and I'm paying those 10 people, is that a

19:48money-making service? You know, probably not. To your point there, safety is really paramount when it

19:55comes to that type of vehicle. And aside from techie cities like Austin, like San Francisco, is there

20:02widespread appetite for something like a robo taxi? I think there is. I mean, I've been really

20:09surprised. Here in L.A., they launched and they opened to the public about almost a year ago in Los

20:15Angeles. And it's it's it's been growing section by section. They're still only in a portion of the

20:21city. What I've been surprised about is how quickly it's both normalized and people really like

20:27it. You know, I have friends who use it quite regularly now when they go out to dinner or

20:33something just and they prefer it to a standard Uber. There's a sense of more privacy. Now, even

20:39though you're probably being monitored because there are cameras inside the vehicle, there's no human

20:45driver in the front. And so the feeling is there is more of a feeling of privacy and it is a more

20:51premium experience. The vehicles are immaculate. There are these nice Jaguar I-PACE electric

20:57vehicles. It's kind of a comfortable plush interior. It's probably about 10 percent more expensive than

21:04your Uber ride, even with the tip. But it's a very pleasant experience. So the surprising thing is how

21:10quickly people have adapted to it. The it goes from being like, oh, gee whiz for, you know, the first

21:16ride or two to something that people very quickly grow comfortable with. And that's been very, very

21:21interesting. I'll be fascinated. I'm in Los Angeles in 2028. We have the Summer Olympics. It'll be back

21:27in L.A. again. I'm certain that a big chunk of that, there'll be robo taxis all over L.A. helping

21:34people move around from event to event because it's going to be the no car Olympics. And what that means

21:39is you're not going to be able to drive your own car because there's not going to be any parking.

21:42Robo taxis? Perfectly fine. Drop off and pick up? Great. No problem.

21:47I mean, that's incredible. I'll see. I'm in New York, so I'll see if robo taxis take over here. But

21:53I'm curious what exactly you're looking out for next with Tesla, because for weeks now,

21:58you've been reporting grim outlook after bleak outlook for Tesla. What specifically is on your

22:04radar next? Well, I guess I'll be interested to see how long investors stick with the story.

22:12Because of past success, and this is always in earnings reports and in contracts, past performance

22:20is no indicator of future performance. Unfortunately, I think a disproportionate number of people who buy

22:26into Tesla assume Elon can work miracles one after the other. And he has an incredible track record.

22:33What he did with Tesla is historic in the automotive industry. What he did with SpaceX is historic in

22:39aerospace. He's had real successes to point to. And that's, in some cases, it's a double-edged sword

22:46because people think, oh, well, he can do it again. There are people like me who've been watching the

22:52story for a very long time. And it's like, that's all true. But for every big success, there have been

22:56a number of failures that never happened. And so people tend to forget all the things he claimed he

23:01was going to do or that Tesla was going to do that never materialized. And so, you know, the guidance

23:09with Tesla and Elon is, you know, use your best judgment. Because many of the things he predicts or

23:16promises are aspirational. But they're not necessarily things that are always going to happen.

23:23I think when he says them, he believes it's going to happen. But that's just not been the case. Whether

23:29it's been putting solar roofs on homes at low affordable cost, battery swapping, selling 20

23:36million EVs a year. I mean, the number of targets that he's put out there and missed, or that they

23:42were going to have robotaxis in 2019, and then it was 2020, and then it was 2021. And now it's 2025.

23:47Okay, maybe they'll have some. But, you know, one would think at this point that people would

23:54always be cautious in counting on many of these things to materialize based on past history.

24:02So what I'm curious to see is at some point, do more investors begin to say, okay, you need to focus

24:10on the core business. Tesla needs better EVs, new EVs. You need to focus on the battery business.

24:15Expand your charging services, add more charging stations, and charge Ford customers, and General

24:20Motors customers, and Lucid, and Rivian customers to charge at your stations. That's a business.

24:25That's a really good business. Build those out. Make those better. Those are great. If I'm an

24:30investor, I'd love to see all of those things. I'm not interested as an investor in maybe you'll

24:38have robotaxis, maybe you'll have humanoid robots, maybe you'll have AI services. Until it's a

24:44concrete business, you know, I think one should be somewhat skeptical. And so I guess, I mean,

24:53this is a, it's not something I'm looking forward to, but one of the things I keep waiting to see

24:57is, will there be a broader sense from the investing community that Tesla, you know, you need to,

25:04to, you know, don't just say it, prove it. Show me that you can do these things, deliver on these

25:10things. If you can, I will reward you by buying your stock. If you continually make promises that

25:16you do not fulfill, perhaps I should be a little more skeptical and sit tight for a while. And, you

25:25know, he has this ability to command an amazing amount of attention, an amazing amount of money from

25:31patient investors. I'm not sure that's always rewarded. It certainly has been. I mean, the stock,

25:36just phenomenal growth over the past few years. At some point, though, it seems like you really do

25:42have to deliver on all that promise. And I think we're kind of, that's 2025 feels like that sort of

25:48year, like, is this a make or break year where he really does have to start delivering on some of this

25:52stuff? I think what you're saying, it sounds like we are looking at how much runway he has with these

25:58patient investors. That's certainly something we will continue to have conversations on. Alan

26:03Owensman, per usual, thanks for coming on. Thanks. Good to be with you, Brittany.

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