Tesla CEO Elon Musk is facing criticism for his handling of the company’s autopilot system, which has raised concerns about safety and customer trust. Despite the car maker’s success in growing its value beyond $1 trillion, Musk’s decisions are now coming under scrutiny.
Musk’s financial results show a decline in gross profit margins to below 15%, despite falling costs per car. The average price of Tesla’s vehicles also tumbled below $40,000. In Germany, electric-vehicle sales plummeted nearly 40% market-wide, and the US President is threatening to scrap subsidies for clean vehicles.
The political fallout could exacerbate problems for Tesla. The company’s share of the US EV market slipped again in the final three months of 2024. Musk has added new responsibilities, including guiding space, social-media, artificial intelligence, and neurological ventures, which may distract him from his core business.
However, some analysts believe that the end of subsidies could fatally weaken competitors and benefit Tesla’s energy storage unit. The company’s self-driving system is also expected to improve economics for the vehicle technology.
Investors are counting on total success, but Tesla faces a challenging road ahead. The car business is slowing down, and Musk may need to reconsider his approach to avoid alienating customers.
Source: https://www.reuters.com/breakingviews/elon-musk-dangerously-overrides-teslas-autopilot-2025-01-29